Uber’s license to operate in London was revoked overnight, a surprise decision that will affect the 3.5 million people and 40,000 drivers who use the app in the city.
The city’s transportation regulator, Transport for London, said the license will expire on September 30.
Regulators said it denied the license because Uber’s "approach and conduct demonstrate a lack of corporate responsibility."
City officials cited Uber’s use of a secret software tool called "Greyball" that the company built to avoid regulators. Uber was also faulted for not properly reporting crimes and obtaining medical certificates.
"TfL has concluded that Uber London Limited is not fit and proper to hold a private hire operator license," the regulator said in a statement.
Uber has 21 days to lodge an appeal, and can continue to operate during the appeal process. “We intend to immediately challenge this in the courts,” said Tom Elvidge, general manager of Uber in London.
London’s ruling decision pits the popularity of the company among millions of customers, against regulators and taxi drivers who want tighter controls.
The decision was cheered by the city’s traditional black cab industry, which has been hurt by the proliferation of Uber drivers and has aggressively pushed for tighter regulation of the San Francisco-based ride-hailing service.
Taxi drivers, many of whom now use the rival apps Gett and MyTaxi, must go through extensive testing before receiving a license, while Uber drivers have fewer requirements.
"All companies in London must play by the rules and adhere to the high standards we expect," London Mayor Sadiq Khan said in a statement. "Providing an innovative service must not be at the expense of customer safety and security."
Uber cars have filled London streets since its arrival in the British capital in 2012, identifiable by the smartphones drivers keep holstered to their windshield.
Uber disputed the allegations made by regulators. The company said it conducts thorough background checks of drivers and had made several changes to improve safety. The company also said the Greyball program had never been in the U.K. “for the purposes cited by TfL.”
“By wanting to ban our app from the capital Transport for London and the Mayor have caved in to a small number of people who want to restrict consumer choice,” said Elvidge, the Uber manager in London. “If this decision stands, it will put more than 40,000 licensed drivers out of work and deprive Londoners of a convenient and affordable form of transport.”
Some are already coming to the defense of Uber. "It’s not in the interests of our economy, people in London and in this case, drivers, to restrict new products and services," said Tom Thackray, director at the Confederation of British Industry.
Although the conclusion of the ruling may take some time to play out in the U.K. courts. rivals are already circling Uber users. Daimler-owned Mytaxi, a black cab hailing app, is currently offering 50 percent off its fares from Friday.