The taxi and limousine services Uber and Lyft are expected to shutter their operations in Peru next week, according to a local newspaper.
Uber, which operates in the country since 2012, said it would close its operations in the Peruvian city of Lima, while Lyft, which offers an app that allows people to hail a ride, said they would also close.
Both companies said they were working with authorities to figure out how to continue to operate in Peru.
Peru is the world’s fifth-largest economy and home to about half the world population.
The government has taken a hard line against Uber and other ride-hailing services in recent months, saying that their activities violate regulations and violate the country’s sovereignty.
“It’s not safe anymore to be using ride-sharing apps like Uber,” President Ollanta Humala said in December, after announcing a ban on ride-booking services.
“We will not tolerate ride-shareers operating in our country.”
Uber has faced criticism in the United States for using drivers from the country, including the driver of a truck that struck and killed nine people in May.
The company has said it will keep operating in Peru despite the crackdown.
Uber drivers, however, have faced other restrictions, including being barred from driving taxis and cars.
“A lot of our drivers in Peru are afraid of the law,” said Juan Carlos Aguilar, an Uber driver in Lima.
“They are afraid that if they work for Uber, that they might be prosecuted.”
The company said it has received several complaints from drivers in Lima about Uber’s behavior.
Uber did not immediately respond to a request for comment from ABC News.
The news comes as Peru has seen a wave of new taxi drivers who use the Uber platform to earn money.
The service, which has become popular in Peru because of a crackdown by the government on ride sharing, has attracted more than 60,000 drivers in the last five years, according the taxi and car rental service Icaro.com.
“Our taxi drivers have to find other jobs, so they can make ends meet,” Icaros co-founder Andres Martínez told ABC News on Tuesday.
“Uber is a great tool for people who want to work for the minimum wage or have to work long hours, but we also need to be doing everything we can to create an environment that supports the taxi industry.”