The colourful fleet of 12 three-wheeled motorised rickshaws, called tuk-tuks after the sound of the engine, have been patrolling the seafront at Brighton, southern England, since July 2006.
But Dominic Ponniah of TucTuc Limited said they have become impossible to run due to legislation which requires them to operate to a timetable, like a bus service, rather than like a taxi service.
"We have decided to resign our licence as the current situation is just not workable," he said.
"We have really pushed for new legislation to be put in place to accommodate alternative types of vehicles. There is obviously a market for them, but they can't be licensed in the appropriate way.
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Tuk-tuks are seen as a possible solution to urban road congestion as they are small and can weave through traffic.
Ponniah imported his 12 from Pune in western India.
They run on compressed natural gas and can reach speeds of up to 35 miles (56 kilometres) an hour.
There had been plans to spread the servic