(Reuters) – Ride-sharing company Uber has been ordered by South Carolina regulators to cease operations in the state while it remains in the process of seeking permission to legally do business there.

The San Francisco-based company, valued at about $40 billion in its latest fundraising, has touched a raw nerve in many parts of the United States and other countries by threatening to open up often tightly controlled and licensed taxicab markets.

Uber said in a statement that the South Carolina Public Service Commission’s order directed at Raiser LLC, an Uber subsidiary, was unexpected and issued despite the company’s close work with state regulators.

“We have challenged the order and remain committed to providing South Carolinians with greater opportunity and choice,” the company said.

The commission said it believes Uber has been operating in the state since July. On its website, Uber offers service in four South Carolina cities: Columbia, Charleston, Myrtle Beach and Greenville.

The ride-sharing company has been under increasing scrutiny over passenger safety issues. In recent weeks, two Uber drivers in Chicago and another in New Delhi, India, have been accused of sexually assaulting passengers.

Prosecutors in Los Angeles and San Francisco last month said they sued the company for misleading customers about its background checks on drivers.

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