Uber had hoped that new leadership would help it turn the corner on a turbulent period.
The decision by Transport for London, which is responsible for the city’s subways and buses, as well as regulating its taxicabs, illustrates the gravity and severity of the issues confronting Uber. And a ban on operating in one of its largest markets — a global city where it has 40,000 drivers and 3.5 million customers use its app at least once every three months — would hit the company’s bottom line.
Transport for London said it had concluded that Uber was “not fit and proper to hold a private hire operator license.”
Among the issues it raised: how Uber deals with serious criminal offenses; how it conducts background checks on drivers; and its explanation for its use of a software program called Greyball that “could be used to block regulatory bodies from gaining full access to the app.”
Tom Elvidge, Uber’s general manager in London, said that the agency and London’s mayor, Sadiq Khan, had “caved in to a small number of people who want to restrict consumer choice.”
Uber conducted background checks using the same methods as those used for black-cab drivers, he said.
“Our pioneering technology has gone further to enhance safety with every trip tracked and recorded by GPS,” he said, adding that the company had “a dedicated team who work closely with the Metropolitan Police.”
He added that Greyball “has never been used or considered in the U.K.” for the purposes cited by Transport for London.
Uber is used in more than 600 cities around the world, and in more than 40 cities and towns in Britain. According to the company, by 2015 it had driven Londoners almost 100 million miles, and taken them on 20 million trips.
“This ban would show the world that, far from being open, London is closed to innovative companies who bring choice to consumers,” Mr. Elvidge said.
John Colley, a professor at Warwick Business School, said the decision was the latest sign of an erosion in Uber’s corporate image.
“There is a very long list of businesses who have suffered for failing to uphold the level of values necessary,” he said. “Until Uber gets this message, then it will suffer lost trade as a result of its deteriorating reputation.”
Uber arrived in London in 2012, just ahead of the Summer Olympics, initially with a luxury service, adding UberX, which competes more directly with London’s storied black taxis, a year later.
Its debut here created a clash almost immediately with those black cabs, which trace their roots to 1634. To earn their licenses, black-cab drivers must memorize some 25,000 streets and 100,000 landmarks across the capital for an exam known as The Knowledge, considered among the world’s toughest.
Black-cab drivers complain that Uber drivers are under-regulated and that they don’t have to satisfy the same exacting standards. Moreover, Uber fares are about 30 percent lower than those of black cabs, whose drivers fear that Uber will put them out of business.
The conflict also involves tensions over ethnicity and class — most black-cab drivers are white native-born Britons, while many Uber drivers are immigrants who see the service as a means of seeking a better life.
Uber has said that it receives hundreds of complaints a month from its drivers about remarks from black-cab drivers. Among the insults hurled are “Uber slave!” and “Go back to your country!”
Many black-cab drivers have now signed up with competing apps like Gett and MyTaxi, which like Uber allow passengers to hail rides via their smartphones. Londoners can also choose from a wide variety of private-hire services, known as minicabs.
The GMB, a trade union that has challenged Uber in court in Britain, described the license decision as a victory.
“No company can behave like it’s above the law, and that includes Uber,” Maria Ludkin, the union’s legal director, said on Friday. “No doubt other major cities will be looking at this decision and considering Uber’s future on their own streets.”
Ahmad Shoaib, an Uber driver, said the service was being unfairly targeted.
”I know there have been some problems with drivers, but most of us are good and reliable and play by the rules,” he said. “It is not fair to punish everyone because of the mistakes of one or two people.”
Mr. Shoaib switched to Uber from a minicab company in Croydon, in South London, after he saw how much work friends were getting from the ride-hailing service. He described Uber as “like our family business,” and added, “London needs Uber, it’s cheap and easy.”