Uber has been stripped of its London licence in a surprise move that has triggered an outcry from drivers at the ride-hailing company and Conservative politicians.

The firm’s application for a new licence in London was 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. This means Uber cars will not disappear from the streets immediately and will continue to operate for its 3.5 million users in the capital until the firm has exhausted the appeals process – which could take months. 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.