Colombia has ordered Uber to halt its ride-hailing operations in the Andean country in a decision that has sent shivers through technology players in Latin America.

The ruling came down Dec. 20 from the Superintendency of Industry and Commerce, which said that Uber was competing unfairly with taxi services. The app has essentially functioned for years in Colombia in regulatory limbo⁠—the Technology Ministry declared ride-hailing apps legal, while transportation authorities said they were breaking the law.

Critics called the decision illogical, saying it's like forbidding email in an effort to protect the postal service, or blocking cellphone use to shield fixed-line telephones.

"Under this logic, absurdly, they're going to have to suspend Netflix, Airbnb, Amazon and hundreds of other service providers. Technology moves faster than legislation, one must adapt," said David Luna, a lawyer who specializes in administrative law and is a director at Colombian think tank Al Centro.

Apps offer services that make life easier for consumers, Luna argued, not for monopolies.

Uber said it is confident it can eventually reverse the move. At the same time, company officials are concerned that other countries in Latin America may follow suit. Countries such as Brazil, Chile and Mexico have opted to regulate ride-hailing apps, rather than to ban them outright.

The Colombia ban came the same week as a ruling against Uber in Germany, where the company works with licensed private hire vehicle companies in an effort to comply with German transportation law. In November, Uber also lost its license to operate in London.

Uber said in a statement that it has appealed the decision in Colombia, which it believes violates due process and contradicts the government's professed desire to promote innovation and entrepreneurship. The company has been in Colombia for six years.

At least 2 million Colombians use the service, which relies on more than 88,000 drivers. Just in the past 18 months, Uber said its services have generated more than 70 billion pesos ($21 million) in tax revenue for the government.

Colombia has been a hotbed for startup activity. The country of 49 million people has proven to be an apt testing ground for apps and new internet services, despite having the lowest broadband internet penetration of any country in the OECD.

The country produced investor sensation Rappi, a delivery service for restaurant takeout food and groceries that has spread to seven other countries in Latin America. Japan's SoftBank injected $1 billion into Rappi in May, giving it a majority stake in the startup.

Rappi has also faced regulatory heat in Colombia. In September, the Superintendency said it had launched an investigation into Rappi for possible violations of consumer rights.

The battle with Uber, though, has been particularly antagonistic. The Superintendency fined the company $2.1 billion pesos ($632,000) in August for alleged obstruction. The regulator also took the unusual step of fining two of the company's legal advisers, and naming them publicly.

The lawyers, the regulator said, gave evasive and incomplete statements about their responsibilities within the company, as well as about the corporate structure of Uber in Colombia. Employees did not allow inspectors to access internal documents or archives on computers, the Superintendency said.

Taken together, the regulatory scrutiny of Uber and Rappi paint a daunting picture for tech startups operating in Colombia. But they also reflect the criticisms emerging around the world about jobs in the gig economy that dodge contributions to social security systems for workers and gain a competitive edge by not paying for licenses, permits and taxes often borne by incumbents in the marketplace.