The ride-hailing service, which now has about 2,000 drivers and 300,000 riders on the app in the country, will leave Denmark on April 18. the company statement read.
Though Uber has been in Denmark since 2014, it has faced a significant share of problems there since the outset of its service.
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Uber has closed down operations in Denmark after running into legal troubles in the country.
CNN reports that this leaves 2,000 Uber drivers and 300,000 riders in the lurch in Copenhagen, the only Danish city where Uber operated.
"Unfortunately, due to the upcoming changes in regulations, we have been left with no choice but to close the service", an Uber spokesman said, adding that the company would "support" drivers who will lose work. "I believe that we must be open to new technologies and innovative business models".
Uber said it will maintain its corporate footprint in Denmark.
Minister for transport Ole Birk Olesen of the Liberal Alliance party said in an official statement that it was "unfortunate" that there was not majority support for a liberalising of taxi laws that would have made Uber's life easier.
According to the new draft law all transportation of persons for remuneration, which goes beyond the direct costs of driving, is to be considered a commercial activity.
Some Danish government officials, however lamented Uber's departure.
"We have a team of 40 talented engineers based in Aarhus who help develop Uber technology for users around the world".
Two Danish Uber drivers were fined in November for abusing taxi laws.