Uber has been told its self-driving cars are illegal - but it is refusing to take them off San Francisco's roads.
The company started testing the vehicles this week, but the Department of Motor Vehicles (DMV) has said the firm must have a test permit.
Uber said it did not need one as they have a safety driver at the wheel, and is going to ignore the demand.
California's attorney general - the state's most senior government lawyer - said Uber must cease the driving immediately or face further action.
A spokeswoman for the attorney general's office would not be drawn on what the specific action could be, but the next step would likely be a court order compelling Uber to carry out the demand.
|Uber had started to pick up passengers in specially-modified Volvo self-driving cars. Photo: Volvo
Other companies testing autonomous technology in California, such as Google, have applied for and obtained the permit which costs $150 (£120) for 10 vehicles.
Additional vehicles can be added at a rate of $50 for each additional 10 vehicles.
"It is illegal for the company to operate its self-driving vehicles on public roads until it receives an autonomous vehicle testing permit," said Brian Soublet from the California DMV in a letter to Uber this week.
In a conference call with media on Friday, Uber's vice-president of Advanced Technologies Anthony Levandowski said Uber had "respect" for officials, but that the regulations were irrelevant to its cars.
"You don't need a belt and suspenders if you're wearing a dress," he told reporters.
In his view the permit only applies to cars that could operate "without the active physical control or monitoring of a human operator".
Uber's cars need a human, he said - although the company still intends to refer to the vehicles as "self-driving cars".BBC