Uber Technologies (UBER) - Get Report shares slumped lower Monday after transport authorities in London revoked the ride-sharing group's right to operate in the British capital.

Transport for London, the city's legal authority on all matters in the sector, said Uber was no "fit and proper" to hold an operating licence in the capital, citing what it called a "pattern of failures" by the ride-hailing group that put the city's 3.6 million customers at risk. TfL said errors in the Uber app, which passengers use to engage freelance drivers contracted by teh group, allowed unauthorized drivers to book more than 14,000 trips. 

"While we recognize Uber has made improvements, it is unacceptable that Uber has allowed passengers to get into minicabs with drivers who are potentially unlicensed and uninsured," said TfL's director of licensing Helen Chapman. "It is clearly concerning that these issues arose, but it is also concerning that we cannot be confident that similar issues won't happen again in future."

Uber shares were marked 3% lower in early trading Monday to change hands at $28.78 each, a move that wold leave the stock some 36% south of its early May IPO price of $45 per share.

Uber now has 21 days to appeal the decision the Westminster Magistrate's Court, which overturned an earlier TfL ban on the ride-hailing company in 2018.

"Over the last two months we have audited every driver in London," said Jamie Heywood, Uber's Northern and Eastern Europe head. "We have robust systems and checks in place to confirm the identity of drivers and will soon be introducing a new facial matching process, which we believe is a first in London taxi and private hire."

Uber's riding-sharing revenues from European markets grew by 24% last quarter to $534 million, the company reported, but that figure is about five times smaller than the $2.4 billion Uber generates in the U.S. and Canada.

Uber's London business has proven controversial on a number of levels, including its use of a Netherlands-based sister company to avoid paying a 20% value-add-tax on rides booked by customers in Britain, a technique that one U.K. lawyer, who is bringing a case against the firm, has cost taxpayers nearly £1 billion.

Uber's business model in the so-called "gig economy", which uses self-employed drivers instead of hiring them as part of the company's full-time staff, is something that Britons have grown increasingly frustrated with in recent years and could resonate well with the political leanings of Mayor Khan.

Uber's business model in the so-called "gig economy", which uses self-employed drivers instead of hiring them as part of the company's full-time staff, is something that Britons have grown increasingly frustrated with in recent years and could resonate well with the political leanings of London Mayor Sadiq Khan.

There are around 85,000 of London's iconic Black Cabs in the capital, according to the most recent U.K. government statistics, but they are among the most expensive in the world.

Carspring.co.uk, which calls itself Europe's first truly online used car dealership and is registered by the U.K.'s Financial Conduct Authority, says the average price for a 3 kilometre (1.86 mile) journey in a Black Cab is $12.35, including initial fares. That's nearly twice the price of a similar journey in New York ($7.85) and Chicago ($7.90).

Uber's London cars have a minimum fare of £14 ($18.99) but the company claims its per mile average is $4.80 - around a third less than the London Black Cab average.