Its lurid pink cars and women drivers were launched to provide a safe and hassle-free service for women of all ages worried about getting into taxis driven by men.

But the women-only cab company Pink Ladies is being threatened with closure after its founders were taken to court this week by Warrington council in Cheshire and charged with operating an unlicensed private hire company.

The Warrington-based firm, which was launched four years ago, said it could close if the council won its case because if they registered under the taxi licensing system, sex discrimination laws would force its drivers to pick up male customers.

"We will fight this all the way to the high court," co-founder Andrea Winders said yesterday. "We are not a taxi service. We are a unique organisation. We do not fit within current legislation, therefore Warrington council has decided to issue court proceedings against us personally."

Winders and her business partner, Tina Dutton, set up the service after their daughters and friends spoke of their unease at being the last one left in a taxi with a male driver after a night out. "The council's actions could mean the closure of Pink Ladies and this would put safety of women at risk, particularly at night," said Winders.

Their private members' club status means their drivers only pick up women members and can turn down male customers. Their 14 Renault Kangoo vehicles are, in effect, owned by club members who pay to hire a driver when they use the car club. The club produces its own magazine and organises days out for its 14,000 members – 15% of the women in Warrington.

"Women feel safer when they go out after dark," said Dorothy Davies, a pensioner who regularly uses the service. "They are a great asset to this town. They are irreplaceable."

According to Pink Ladies, all its drivers have enhanced criminal records bureau checks and their cars meet the government's safety and MoT requirements for private hire vehicles. "Of our own volition, we are complying with the regulations the council would put on us," said Winders.

The case against the firm began when council officials posed as customers last November using the Regulation of Investigatory Powers Act, designed to combat terrorism and serious crime. Pink Ladies claimed the operation was "an ambush".

The full trial will be heard at Runcorn magistrates court in July.

James Parry, a solicitor for Pink Ladies, said: "We've got a good legal case that this is not a private hire company. It is a great shame that the council is wasting taxpayers' money in pursuing this matter."