Labour could stop controversial cab-on-demand app Uber from operating in Britain over concerns about its tax arrangements.
Shadow transport secretary Mary Creagh warned that Labour would not tolerate "tax avoidance on a large scale", describing Uber's tax arrangements, being based offshore, as "interesting".
She also seized on the fact that drivers using Uber are classed as self-employed to justify her concerns, calling on the cab app firm to "do more to demonstrate that its drivers are paying taxes".
Mary Creagh says won't support Uber until it shows mechanism forcing drivers to pay tax. Notes it's "interesting" the firm is based offshore— Lucy Fisher (@LOS_Fisher) September 22, 2014
The cab app has also been banned in some major cities around the world, with a German court overturning a nation-wide ban last week.
London mayor Boris Johnson has previously said it would be "very difficult" to ban Uber, with any attempt risking a judicial review.
Business groups hit out at Creagh, who made her comments at a Labour Conference fringe meeting in Manchester on transport organised by the New Statesman on Monday morning, accusing her of"demonising" Uber drivers.
A spokesperson for the Institute for Directors said: "As new technology and innovation continues to change the way we go about our lives, more and more people will be able to take ownership of their labour and get a foothold in the economy.
"It's exactly this kind of new economy that Uber represents, and politicians should be careful not to demonise Uber drivers, who are effectively self-employed and entrepreneurial.
"We should be encouraging the new economy, and all the social benefits it brings, not peddling scare stories about the tax affairs of a new generation of self-employed drivers."
Meanwhile, a spokesperson for Uber said the firm "complies with all applicable tax laws, and pays taxes in all jurisdictions, such as corporate tax, income tax, payroll tax, sales and use tax, and VAT."
Uber added that its drivers are "independent businessmen that use the platform" and are not employed by the firm.
Creagh also used her appearance to take Virgin Trains to task over its talking toilets, saying that they were "very annoying when you are trying to make a phone call" and "not the kind of innovation people want".
After being told by a Virgin representative on the panel that the toilets were not designed for users to make phone calls in them, Creagh shot back: "It depends how many journalists you want to hear them."