The decision not to issue Uber with a new licence to operate in London has split politicians with supporters of the move claiming it could be a "game changer for the gig economy" but critics claiming the capital was turning its back on "free trade and innovation".
Work and Pensions Committee chairman Frank Field said Uber must respond to the decision by "resetting its business model" to offer a safe and reliable service with fairer conditions for drivers.
But Conservative MP Chris Philp said it was a "shocking misjudgment" by London mayor Sadiq Khan to support the decision to effectively ban the minicab app.
Fellow Tory Tom Tugendhat claimed Mr Khan was a "luddite" who wanted to "switch off the internet" following the Transport for London (TfL) decision.
Labour MP Mr Field said: "This could be a game changer for the gig economy. Uber must now respond to TfL's decision by totally resetting its business model.
"This new model will need to be built upon two foundations: a safe and reliable service for every passenger; and a living wage and fairer conditions for every driver who makes themselves available for work."
But Croydon South MP Mr Philp told the Press Association: "I very strongly oppose what Sadiq Khan has done.
"There are issues Uber needs to address, but by outright banning them in London it's going to put 40,000 people out of work and 3.5 million Londoners are going to pay higher fares.
"The people most affected are going to be people on low incomes who can afford to take an Uber but can't afford to take a black cab."
He added: "Sadiq Khan is sending out a message that London is not interested in free markets and not interested in innovation and that is a terrible message for Sadiq Khan to be sending, particularly given everything else that is going on with Brexit
"It's a shocking misjudgment by the mayor of London."
Senior MP Mr Tugendhat, the chairman of the Commons Foreign Affairs Select Committee, said Uber has problems but "banning them is a vote against choice".
Green Party joint leader and Brighton Pavilion MP Caroline Lucas welcomed TfL's decision and hoped that her city would follow London's example.
She said: "We need to see more corporate responsibility in the gig economy."
Labour MP Wes Streeting, chairman of the All Party Parliamentary Group on Taxis, said: "This is a courageous decision by the mayor and Transport for London, finally drawing a line in the sand to make it clear that no company, however big and powerful, will be allowed to flout our laws and regulations or jeopardise Londoners' safety without facing serious consequences."
The Ilford North MP said: "Uber has not shown itself to be a fit and proper operator.
"It stands accused by the police of failing to properly handle serious allegations of rape and sexual assault of passengers.
"It had to be dragged through the courts to recognise its responsibility to provide even the most basic rights and protections to Uber drivers.
"Its business model is based on saturating London's taxi and private hire market to drive its competition off the road.
"That's why major cities across North America and Europe have already banned Uber from operating on their roads."