If Uber can’t make it in London, then where?

British capital’s move against ride-sharing giant indicates that its brash corporate culture is hurting global expansion plans.

European countries and cities have one-by-one outlawed one form or another of Uber’s ride-booking services.

Now London, one of Uber’s largest global markets, is outlawing the $68 billion company from the streets of the British capital. This latest blow for the California giant in Europe raises more doubts about the viability of its business model on this side of the Atlantic.

Uber said the stripping of its license Friday by Transport for London, the local transport authority, would disappoint its vast customer base in the city — 3.5 million users, it says — and put 40,000 drivers out of a job. It promised to appeal and can continue to operate pending a verdict.

But the company has a lot more riding on the British capital than it let on publicly on Friday. Alongside Paris, London is Uber’s largest market in Europe, and was seen as politically more open to new technology and the so-called sharing economy.

The unexpected setback in London comes at a difficult time for Uber. In the coming months, labor tribunals in the U.K. as well as the European Court of Justice are expected to hand down verdicts that could saddle it with extra regulation, making it harder than ever for the company to operate. To boot, Friday’s decision by London is the latest indication that the company’s bullish and brash corporate culture — which recently led to the ouster of Travis Kalanick, the company’s founder — is hurting the company’s global expansion plans.

Losing its London license to operate private hire vehicles across the U.K. capital would effectively shut down Uber’s app, which now connects passengers to licensed drivers.

“This ban would show the world that, far from being open, London is closed to innovative companies who bring choice to consumers,” said Tom Elvidge, Uber’s general manager in London.

London Mayor Sadiq Khan embraced the decision by the city regulators appointed by him.

“The conclusion reached by the [Transport for London] officials is that Uber aren’t playing by the rules and there are big concerns that TfL have about Londoners’ safety and security,” Khan said on LBC radio.

“TfL isn’t anti-private hire vehicle operators,” he added. “What TfL is against is companies not playing by the rules so customers, members of staff and others should be angry at Uber for not playing by the rules, rather than TfL who are doing their job by making sure companies are playing by the rules.”

While Khan has sought to attract technology companies to the British capital, the popular Labour Party politician has pushed to make sure people who work in the “gig economy” like Uber drivers are provided the same rights as employees in traditional companies. TfL’s decision comes just as the Labour Party gathers for its annual conference in Brighton next week.

Uber’s Plan B

Uber has encountered resistance from the start in Europe, and sought creative ways around it.

The company’s most controversial service — UberPOP — connects passengers with ordinary, unlicensed drivers at a fraction of the cost of a normal taxi ride. It was promptly closed down or withdrawn from much of Europe in the face of opposition from taxi firms and authorities. The firm’s executives have been prosecuted and fined €800,000 in France.

The ride-booking app tried to invoke EU law in its defense and petitioned EU institutions to intervene, but to no avail.

In response to hostility toward UberPOP, the firm rolled out Plan B in much of Europe, i.e. services that connect passengers with licensed drivers, called UberX. This Uber app became popular because of its functionality and simplicity, although its prices more closely resemble those of normal taxis. In parallel, the company focused its energies on smooth-talking regional and municipal authorities, explaining how its service can help deal with problems like congestion or pollution.

London was one of the first cities to welcome Uber’s new plan, with Transport for London granting it a private hire vehicle license in 2012.

But TfL concluded Friday that Uber London Ltd. was “not fit and proper to hold a private hire operator license” and cited a “lack of corporate responsibility.”

In particular, it pointed to the company’s approach to “reporting serious criminal offenses,” obtaining medical certificates and conducting background checks for drivers. TfL also faulted Uber’s “approach to explaining the use of Greyball in London.” Greyball was a software that allowed the firm to stop drivers from picking up certain passengers, which was allegedly used to prevent law enforcement agents from catching drivers and officials from conducting snap inspections.

“The thing that tipped the balance has been the attempt to block the mystery shopper system,” said Christian Wolmar, an author on transport issues who previously ran unsuccessfully to become London’s mayor. “That really showed Uber weren’t prepared to play by the rules.”

Uber said it complied with Transport for London’s safety and security requirements. Changing its procedures also could help the ride sharing service qualify for a license again. TfL did not rule out licensing a transport company with Uber’s business model altogether.

Tom Thackray from the Confederation of British Industry, a trade group, said that a deal should be reached between TfL and Uber as it’s “not in the interests of our economy … to restrict new products and services.”

While Uber is mired in cases related to its operations, other mobility services are looking to compete. On Monday, timetable aggregator Citymapper will launch a tie-up with black cab app Gett offering shared rides at rush hour.

Meanwhile, the company’s lawyers will be in a U.K. court next week to argue a separate case relating to whether the 40,000 drivers using the Uber app can claim to be workers, and thus entitled to rights like the minimum wage and sick pay.

The case is on appeal from an employment tribunal that drivers in the U.K. could potentially be classified as a type of employee who should be paid the national minimum wage, get breaks during shifts and paid holiday leave. The two drivers that brought the complaint are backed by the GMB, a union with some 639,000 members.

Future of ‘sharing economy’

The mounting problems for Uber across Europe and farther afield also put a spotlight on the so-called sharing economy, in which companies like Uber and Airbnb, among others, connect people through digital services to offer taxi rides, hotel rooms and other products that were dominated by traditional industries until recently.

Many in Europe, including parts of the European Commission, welcomed such new entrants to the region’s digital economy. But politicians from several countries, notably in Germany, France and Spain, questioned whether such tech companies play by the same rules as existing industries and whether consumers were sufficiently protected when using these new services.

Debate over the employment practices of new firms like Uber or Deliveroo, a food-delivery startup, prompted U.K. Prime Minister Theresa May to announce a review of the so-called gig economy. Reports have speculated the review could extend the right to holidays and sick leave to workers in the gig economy, which could hurt Uber even if it wins its employment case.

Complicating matters for Uber, the European Court of Justice is expected to hand down its verdicts by late 2017, at the earliest, in legal cases brought by taxi associations in France and Spain.

Both cases will have broad implications for how Uber will be able to operate across the region as they question if Uber is a transport service or a mere technology platform that intermediates the service.

If the judges rules that Uber is mere technology intermediary, the company can shake off many of the rules and regulations imposed on it by national authorities, including those in London.

But the prospects do not look good: A senior adviser to the court already has urged its members not to “let appearances deceive you,” saying that Uber should be considered a traditional transportation service that must comply with existing rules in cities across the Continent.

Uber is a transport company, said the European Court of Justice’s advocate general — and an irresponsible one at that, added Transport for London on Friday.

Mark Scott contributed reporting.

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