Uber’s application for a new licence in London has been rejected on the basis that the company is not a “fit and proper” private car hire operator.
Uber said it planned to challenge the ruling by London’s transport authority in the courts immediately.
The current licence expires on 30 September but Uber has 21 days to appeal and can continue to operate until that process expires.
The decision by Transport for London was backed by London mayor Sadiq Khan, employment rights campaigners, and the trade body for the capital’s black cab drivers, who have been staunch opponents of the US ride-hailing app.
However, it drew immediate criticism from Uber users, a drivers’ representative and Conservative politicians.
TfL said that it had rejected the company’s application to renew its licence because “Uber’s approach and conduct demonstrate a lack of corporate responsibility” in relation to reporting serious criminal offences, obtaining medical certificates and driver background checks.
The licensing body also said it was concerned by Uber’s use of Greyball, software that can be used to block regulatory bodies from gaining full access to its app and undertaking regulatory or law enforcement duties.
Khan said he fully supported the decision to revoke Uber’s licence, saying all companies needed to “play by the rules”.
He said: “I want London to be at the forefront of innovation and new technology and to be a natural home for exciting new companies that help Londoners by providing a better and more affordable service.
“However, all companies in London must play by the rules and adhere to the high standards we expect –particularly when it comes to the safety of customers. Providing an innovative service must not be at the expense of customer safety and security.”“I fully support TfL’s decision – it would be wrong if TfL continued to license Uber if there is any way that this could pose a threat to Londoners’ safety and security.”
Steve McNamara, general secretary of the Licensed Taxi Drivers’ Association, which represents black cab drivers, said the mayor had made the right decision.
“Since it first came onto our streets Uber has broken the law, exploited its drivers and refused to take responsibility for the safety of passengers. This immoral company has no place on London’s streets,” he said.
Uber said in a statement that the decision would “show the world that, far from being open, London is closed to innovative companies”.
“3.5 million Londoners who use our app, and more than 40,000 licensed drivers who rely on Uber to make a living, will be astounded by this decision,” the company added.
James Farrar, a co-claimant in a landmark employment tribunal decision against Uber and chair of the Independent Workers’ Union of Great Britain’s private hire drivers’ branch, said TfL’s decision would be a “devastating blow” for the company’s drivers.
“To strip Uber of its licence after five years of laissez-faire regulation is a testament to a systemic failure at TfL,” Farrar said.
“Rather than banish Uber, TfL should have strengthened its regulatory oversight, curbed runaway licensing and protected the worker rights of drivers. The mayor must call for an urgent independent review of TfL to identify the causes of failure and prevent something like this from ever happening again.”
The majority of Uber users responding to a Guardian request for comment opposed the decision to revoke the company’s licence.
Helen, from Walthamstow in east London, said it was a ridiculous decision and TfL should be working with Uber and regulating them better.
“I use Uber primarily to get home from evenings out with friends,” she added. “With a lack of staff and police visible [on public transport], I often feel unsafe travelling alone and Uber has given me an affordable alternative to get home safely. My partner can also track my journey and knows I am getting home safely.”
Leo, a wheelchair user, said less than 30% of the tube network was accessible to him and buses were slow.
“Uber has been a lifesaver for me. It has got me to visit family at short notice when the nearest accessible station was miles away and the bus took two hours,” he said.
“It has got me to the hospital at the crack of dawn when I have had medical emergencies. It gets me home from work when I am suddenly taken ill, or to and from hospital appointments that leave me exhausted.”
Conservative London Assembly member Andrew Boff said Khan was backing a “hugely damaging decision” that would put thousands of people out of work.
“The mayor consistently tells us London is open but in shutting down the operations of an innovative market leader like Uber he has caused immense reputational damage to our city as a global business hub.
“With 3.5million registered users – almost half the city’s adult population – Uber has shown to be providing a hugely beneficial service to Londoners,” he said.
Tom Tugendhat, Tory MP for Tonbridge and South Malling, accused Khan of being a “luddite” who wants to “switch off the internet”.
“By banning Uber, Sadiq Khan is showing that socialism is about control when the internet is pushing for freedom of choice,” he said.
“True, Uber has problems but Sadiq Khan banning them is a vote against choice using last century controls to order how we choose to live.”
Unions including the IWGB and GMB called on TfL to insist Uber guaranteed basic employment rights under the terms of its new five-year licence.
The GMB union said 72% of Londoners believed TfL should require Uber to safeguard minimum pay and holiday pay for its drivers.
Farrer will be in court next week when Uber is appealing against an employment tribunal ruling that would give its drivers access to the minimum wage, sick pay and paid holidays.
Employment rights campaigners said TfL’s decision was a warning shot to so-called gig economy companies which includes apps such as Deliveroo and delivery firms such as Hermes who argue their drivers and riders are self-employed.
Frank Field, the Labour MP who led a parliamentary inquiry which found that Uber drivers were treated as Victorian-style “sweated labour” said: “This is a game changer for the gig economy. Uber must now respond to TfL’s decision by totally resetting its business model.”
Frances O’Grady, general secretary of the TUC, said: “This should be a cautionary tale for gig economy employers. Unions will expose nasty schemes that cheat workers out of basic rights like the minimum wage and holiday pay.”
The blow to Uber in the UK comes after a tumultuous few months for the company, which has faced a string of scandals involving allegations of sexism and bullying. Investor pressure forced out former chief executive and co-founder Travis Kalanick this summer.
In the US, Uber is facing a federal investigation after the New York Times reported that the company had been using the Greyball software.
The company has been forced to quit several countries including Denmark and Hungary, and has faced regulatory battles in multiple US states and countries around the world.