Uber taxi service will suspend its operations in Hungary due to government legislation that has made its operations difficult in Hungary, it has been announced.
The suspension will come into effect July 24 and will last until a resolution can be found.
"We will be suspending Uber X in Budapest effective on July 24," Rob Khazzam, general manager for Uber in central Europe, told Reuters in an interview.
"Unfortunately, the logic of legislative developments that have unfolded in Hungary over the last 18 months have led us to this difficult decision."
In June, Hungary's parliament passed legislation with the aim of curbing the activities of Uber.
The move followed months of protests by taxi drivers and bans on some Uber services in other countries.
The new law, which comes into force this month, will permit the Hungarian national communications authority to block internet access to "illegal dispatcher services".
Taxi drivers in Hungary have demanded Uber be outlawed and its smartphone app blocked as they say its drivers breach regulations other taxis firms must adhere to.
The Uber taxi service is extremely popular with people living in Hungary, especially Budapest, due to their low prices and quality cars. More than 30,000 residents signed a petition to save the service earlier this year.
Uber says more than 160,000 people use its services in Budapest, but now its 1,200 drivers risk losing their driving licenses for up to 3 years despite being professionally licensed and tax compliant.
"It is not a ban. Uber has not been banned in Budapest, it is simply a forced suspension, we have been left no other alternative by the authorities in Hungary in response to these developments," Khazzam said.
Khazzam said Uber hoped to be back in Hungary and they will continue to work with authorities to make the service viable.