Transport for London says it will not renew Uber’s private hire licence after finding it is “not fit and proper” to hold one.
TfL said the taxi-hailing app had demonstrated “a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications”.
It has told the US-based company that it will not be issued with a new licence after the expiry of its current licence on 30 September.
Uber said it intended to challenge the decision immediately in the courts. It said TfL and London mayor Sadiq Khan had “caved in to a small number of people who want to restrict consumer choice”.
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Sky News had earlier revealed that TfL looked likely to rule against Uber.
Mr Khan said in a Facebook post that he fully supported TfL’s decision.
Uber has about 40,000 drivers in London, and is used by about 3.5 million people.
It has 21 days to appeal the decision and can continue to operate until the end of any appeal process, TfL said.
The authority highlighted Uber’s approach to reporting serious criminal offences, obtaining medical certificates and background checks on drivers, and its explanation of the use of “greyball” software that it said could be used to thwart regulators.
But Tom Elvidge, general manager of Uber in London, said: “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.
“This ban would show the world that, far from being open, London is closed to innovative companies who bring choice to consumers.”
He challenged findings made by TfL, saying Uber drivers were subject to the same checks as black cab drivers, that its technology had enhanced safety, that it followed TfL rules on reporting incidents, and that an independent review had already cleared it over the use of “greyball”.
Uber was licensed as a private hire company in London in 2012 and has since grown rapidly – posing a challenge to the capital’s traditional black cabs – but it has been caught up in the backlash against the so-called gig economy.
In May its licence was renewed by TfL, but only for a period of four months, amid continued opposition and threats of legal challenges from the GMB union and Licensed Taxi Drivers’ Association (LTDA).
Video: Uber: 40,000 drivers will be put out of work
TUC general secretary Frances O’Grady said it should be a “cautionary tale for gig economy employers”.
Unions have raised concerns about such companies treating workers as contractors rather than staff, often resulting in them losing out on rights such as minimum wage and holiday pay.
Video: Tfl: Uber ‘not fit and proper’ to operate in London
Business group London First said TfL’s ruling “will be seen as a Luddite decision by millions of Londoners and international visitors who use Uber”, and would damage London’s reputation as a global tech hub.
It was described as a “disaster” by free market think-tank the Adam Smith Institute.
Uber operates in more than 600 locations around the world, including more than 40 towns and cities in the UK.
The company, which has been valued at almost $70bn, has been in turmoil in recent months over the conduct and subsequent exit of its founder, Travis Kalanick.