In December, after nearly a year of sometimes heated debate, San Antonio approved rules that would give smartphone-enabled ride services the right to compete with regular taxi drivers, but with regulations largely fashioned by the taxi industry.
San Antonio, the seventh largest US city in terms of population and with a major convention trade, later rolled back many of the regulations. But the city council kept some, including those requiring background and drug checks for drivers.
"They have just killed thousands of jobs in San Antonio," Uber Texas Manager Chris Nakutis said.
Nakutis said Uber, which enlists part time drivers to pick up passengers who summon them through smart phones, will still pick up passengers in other parts of Texas, but not in San Antonio.
Representatives from the taxi industry said the city council move would help protect public safety.
Mayor Ivy Taylor said the council struck a balance and the decision to leave San Antonio is up to Uber.
"The conversations we have had with them for the last two weeks have been very positive, it is only in the last two days that they have reversed the tone," she said.
The debate in San Antonio has prompted the Texas Legislature to consider writing statewide regulations to cover transportation companies, mainly involving how much insurance the drivers need to carry.
Dallas and Houston in the past several months have approved Uber and Lyft to operate.
© Thomson Reuters 2015