The City of Shanghai imposed strict laws against the use of cab-hailing smartphone apps Thursday, according a CNN report.

The new laws prohibit the cab-hailing functions of the apps during morning and evening rush hours while the increasingly popular app Uber, which summons private vehicles as taxis, was completely banned.

Uber had hoped to expand its growing industry into the busy city of Shanghai just two weeks ago after initially launching the apps use in China's commercial capital.

Taxi hailing apps in Chinese cities allowed users to offer cab drivers larger tips to gain their service.

According to the Financial Times, the taxi apps in China were met with a lot of positive consumer reaction as it curbed bad traffic and increased road efficiency.

However, the Financial Times reported that the Shanghai Municipal Transport and Port Authority said it would force taxi app companies to shutdown if they do not comply with the new rules.

"Though the taxi booking apps raised efficiency, their marketing and the function to add premium prices have disturbed the fair market order," Shanghai officials said.

According to Beijing's news agency Xinhua, the city passed a similar law last week placing restrictions on cab drivers' use of checking multiple apps to gather more customers. Beijing's law limits its cab drivers to the use of only one cab-hailing app.

"Under the new regulation, however, each taxi is only allowed to be linked with one cab-hailing app," Xinhua reported. "Cab drivers should prioritize driving safety before responding to smartphone messages."

The use of the taxi apps has grown in popularity in major cities around the globe, but many state regulators fear the growing number of apps and its usage has created a competition among cab drivers that negatively affect their livelihoods.

Last September, California became the first state in the U.S. to pass regulatory legislation as its Public Utilities Commission voted 5 to 0 to allow ride-sharing companies such as Lyft Inc. and Uber to operate, according to the Los Angeles Times.

Under the regulations, the companies' drivers must comply with criminal background checks, driver training, laws prohibiting drugs and alcohol, and are ensured with at least a $1 million insurance coverage.

Cities in both the U.S. and Europe are considering enforcing legislation on taxi apps.