Taxify CEO Markus Villig. Taxify

Estonian ride-hailing startup Taxify has slammed London's transport regulator as "the most hostile regulatory body we have ever encountered", and said it had appealed the loss of its licence.

Taxify launched on Tuesday as a cheaper alternative to Uber in London, but had to suspend its services on Friday after Transport for London said it was "urgently investigating" the company and revoked its licence.

Taxify chief executive Markus Villig said in a blogpost that he would "do everything possible" to bring Taxify back to London.

The issues stem from Taxify's unusual licensing arrangements in London.

Unlike other private hire firms like Addison Lee, Taxify is not licensed as a private hire operator under the name "Taxify." Instead, it acquired a totally different cab company which does hold a licence, called City Drive Services.

The idea was to circumvent the lengthy licensing application process and launch quickly in London. Taxify has argued that any drivers working for Taxify are in fact working for City Drive Services — it just provides the booking software, and therefore doesn't need its own licence.

Tfl isn't buying it. In its announcement on Friday, the regulatory body said Taxify "is not a licensed operator" and confirmed it had revoked City Drive Services' licence too. It warned drivers not to take any bookings through Taxify or City Drive Services.

Villig wrote: "It was a great surprise to us that, following the launch of our service, and without any contact, TfL launched a secretive investigation by requesting rides using the Taxify app and threatening drivers with the loss of their license."

He slammed TfL for doing "everything in their power to keep the current private hire monopoly in place."

Though Villig didn't name Uber, the San Francisco ride-hailing firm has dominated London's cab market since its launch in 2012.

Villig concluded: "I believe London deserves better and I will do everything possible to get Taxify back to improving the London marketplace for drivers and consumers as soon as possible."

It won't be easy for Taxify to relaunch in London

Villig faces an uphill challenge to restore Taxify's service in London, not only from TfL. Black cab drivers have been hugely critical of the company, and particularly its promise of cheaper fares.

Although Taxify takes a lower commission fee than Uber of 10-15%, black cab drivers said the lower fares equated to "slavery" and suggested drivers wouldn't be able to make enough to live on.

And a black cab driver co-operative, the London Taxi Drivers' Association, wrote to TfL shortly after Taxify launched, arguing that it was an "illegal operator."