 "Uber faces Taiwan ban for operating illegally")
It is the latest setback for the US company, after it was forced to suspend its operations in Hungary last month and was fined in June for operating illegally in France.
Uber entered the Taiwan market in 2013 and the company and drivers together have already been fined a total of $2.05 million, according to the transport ministry.
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Angry cab drivers surrounded the parliament in capital Taipei last month, demanding the government kick Uber out, echoing similar protests in several other countries.
Authorities say Uber does not have the proper registration to operate as a taxi service.
"They (Uber) are registered as an information services provider, but what they're doing is actually transportation," said Lin Kuo-hsien, a ministry spokesman.
That leaves consumers unprotected, Lin said, adding that some Uber drivers have already had their individual licences suspended and are subject to fines of $50,000.
Taiwan's investment commission, which screens and approves foreign and outward investments, said on Wednesday it would decide on Uber's case by August 11.
"From a preliminary assessment, it is possible" Uber will be banned, Emile Chang, executive secretary of the commission, told AFP.
"It is what the Ministry of Transportation recommends. However, we have yet to come to a final conclusion," he said, adding that Uber could appeal any decision.
Uber did not respond to a request for comment.
The US startup has expanded to more than 50 countries and is worth some $50 billion, but has faced multiple legal challenges and protests from traditional taxi drivers who feel they are being forced out of the market.
Uber announced it was suspending business in Hungary in June, saying new legislation made it "impossible" to operate. The fines in France followed violent protests by established taxi drivers.
In China, Uber agreed on Monday to tie up with ride-sharing giant Didi Chuxing, ending a ferocious battle between the two.