Updated: Uber, the San Francisco-based town car reservation service that has recently moved into lower-cost taxis rides, announced Tuesday that it has shut down its New York taxi hailing operation, only months after launching the service. The difficulty in breaking into New York demonstrates the hurdles that startups face working against city regulations for transportation, and especially Uber’s challenges in cities that already have strong taxi cultures.

The company wrote in a blog post that user demand far outstripped available taxis, making it hard to meet the number of requests, and the company was unable to work with the city and get more taxis on the road:

Unfortunately, as many of you have noticed, there haven’t been enough available TAXIs. Demand far out-stripped supply, making you feel pretty lucky when you got a yellow from your iPhone. We did the best we could to get more yellows on the road but New York’s…