Uber will not be issued a new private hire licence, Transport for London (TfL) has said.
According to the BBC, TfL concluded the ride-hailing app firm was not fit and proper to hold a private hire operator licence.
It said it took the decision on the grounds of “public safety and security implications”.
Confirming it would appeal against the decision, Uber said it showed the world “far from being open, London is closed to innovative companies”.
Some 3.5 million passengers and 40,000 drivers use the Uber app in London.
In a statement, Uber said: “Transport for London and the mayor have caved in to a small number of people who want to restrict consumer choice.”
Uber’s general manager in London Tom Elvidge said: “To defend the livelihoods of all those drivers, and the consumer choice of millions of Londoners who use our app, we intend to immediately challenge this in the courts.”
He said Uber operated in more than 600 cities around the world, including more than 40 towns and cities in the UK.
There had been growing speculation that the app could be banned from London.
Opponents of the firm claim it causes gridlocked roads and does not do enough to regulate its drivers.
The Uber app has completely changed the London minicab and taxi market. As a “disruptive” technology it was popular and cheap.
But although Uber claims 3.5m Londoners use the app and there are 40,000 drivers, the company has been dogged with controversy in London.
It has been blamed for congestion, failing to report sexual offences, not doing proper criminal checks and a rise in collisions.
It has also been criticised by unions for poor working conditions of drivers.
Right up until the last minute, even the black cab organisations which have been fighting Uber since their arrival in 2012 were not certain they had won.
So this is a big shock to the industry and it will reverberate right around the world where the company is trying to operate.
This decision will be appealed and eventually probably go through the courts so it’s not quite over for Uber in London yet.
Mayor of London Sadiq Khan said in a statement: “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.
“Any operator of private hire services in London needs to play by the rules.”
General secretary of the Licensed Taxi Drivers’ Association Steve McNamara said: “The mayor has made the right call not to re-license Uber.
“We expect Uber will again embark on a spurious legal challenge against the mayor and TfL, and we will urge the court to uphold this decision.
“This immoral company has no place on London’s streets.”
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