Theresa May said Transport for London's decision to stop Uber operating in the capital has "damaged lives" and called the ban "disproportionate".
Last Friday, TfL denied Uber's application to renew its licence to operate in London, effectively banning it from running its business in the city.
TfL cited a string of failings which it said meant Uber was not "fit and proper" to hold the licence, accusing it of "a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications".
The decision was supported by London Mayor Sadiq Khan who said Londoners' anger "should be directed at Uber". Khan is also chairman of TfL.
In an interview with BBC London ahead of the Conservative Party conference next week, May said "at a stroke of a pen, what the mayor has done is risked 40,000 jobs and of course... damaged the lives of those 3.5 million Uber users".
"Yes there are safety concerns and issues for Uber to address, but what I want to see is a level playing field between the private firms and our wonderful London taxis, our black cabs," she said.
The Prime Minister said the "blanket ban is disproportionate", adding: "What I think people want to see is choice."
In response, a spokesman for Khan said: "Regulation is there for a reason and it would have been wrong for TfL to have renewed Uber's licence if they had concerns about Uber being a fit and proper operator.
"All companies must play by the rules and adhere to the high standards we expect - particularly when it comes to the safety of customers."
May's comments echo those of other Conservative MPs, including Ed Vaizey, the MP for Wantage and Didcot who last week called the move "catastrophic", and Matt Warman who, writing in The Daily Telegraph, said it was "damaging in the extreme".
A petition to reverse the move by TfL had surpassed 800,000 signatures at the time of writing, making it the fastest growing UK petition this year.
Around 40,000 licensed Uber drivers are facing unemployment in the face of TfL's move not to renew the licence, which expires on September 30.
Uber is appealing the decision, however, and will operate in London during the appeal, which is likely to take months.