Just three months after launching in Bandung, a busy city known for its IT expertise about 160 kilometers from the capital Jakarta, the popular ride-sharing service has been told it doesn't possess the right permits and can't operate.

"Uber has been officially banned, as previously instructed by the mayor of Bandung," head of the traffic unit at Bandung police Asep Amar told AFP Thursday.

"All companies must have the proper permits to operate."

It's not the first time Uber has clashed with authorities in Indonesia, where local transport organizations and traditional taxi drivers have protested against what they claim is an unregulated industry.

Last month 18 vehicles owned by Uber drivers were impounded in Jakarta, with the city's mayor declaring the US-based taxi app illegal.

Uber claims it plays by the rules in Bandung, as elsewhere, and has been given an overwhelming "thumbs up" by passengers and drivers so far.

"It'€™s why we are also disappointed that the government of Bandung has declared that it is banning Uber," the company said in a statement.

Despite the opposition it's faced, Uber still plans to set up a foreign investment company in Indonesia, and has a representative office in Jakarta.

The smartphone-based ride service has sparked angry protests worldwide, with some taxi associations taking legal action while others have demanded the arrest of Uber operators and executives.

Many traditional taxi drivers claim Uber poses unfair competition by flouting rules and restrictions imposed on their own vehicles.

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