The state's department of motor vehicles said yesterday the 16 autonomous cars had not been properly permitted.
Uber's programme had only been running for a week, during which time the department demanded it shut down the scheme and comply with regulations requiring a permit to test self-driving cars on public roads.
California defines autonomous vehicles as having the capability to drive "without the active physical control or monitoring of a natural person".
However, the taxi app had argued a permit was not necessary because the cars came with a safety driver and are not fully autonomous.
"We're now looking at where we can redeploy these cars, but remain 100 per cent committed to California and will be redoubling our efforts to develop workable statewide rules," Uber said.
San Francisco was supposed to be Uber's second testing ground for its self-driving cars, after it unveiled its self-driving cars in September in Pittsburgh (where it has not required permits).
This week leaked financial documents showed Uber lost $800m (£647m) in the third quarter of this year. Its total losses for the first nine months of the year were more than $2.2bn.