Earlier this year, the ride-sharing giant Uber debuted a new service in Israel. Called UberNight, it allowed drivers to register with Uber and pick up passengers late at night, when public transportation isn’t available. The arrangement, the company insisted, wasn’t precisely a commercial transaction: Drivers, it argued, will be compensated only to cover their expenses, such as gas and the wear and tear on their car. Israel’s Ministry of Transportation, however, was unamused, and in May indicted the company for violating regulations that prohibit anyone from charging for rides without the appropriate taxi license.

Uber, however, was undeterred. Tomorrow, the company will launch a new service, called UberDay, which will allow drivers to pick up passengers anywhere in Israel and at any time. Again, the company is arguing that its service is in compliance with the law, and insisting that drivers are compensated for nothing but their expenses and are not full-blown cabbies. The Israeli government, on the other hand, disagrees.

“It’s clear that anyone who uses Uber’s new service is breaking the law,” a senior official in the Ministry of Transportation told Israel’s The Marker. “This goes for the passenger as well as the driver.”

In an undercover investigation leading up to the indictment, the ministry’s inspectors used the UberNight service to ride around Tel Aviv, frequently being charged a price similar to that charged by an ordinary licensed taxi. They also reported several cases of drivers making hundreds of shekels a day, which further suggests that the compensation drivers receive for signing up with the service may be more substantial than mere reimbursement for gas.

Reacting to Uber’s bullish new announcement, the official added that the ministry was contemplating the possibility of issuing a temporary injunction against Uber, as well as launching criminal proceedings against drivers and passengers alike. The ministry’s legal counsel, the official told The Marker, is “consulting with all relevant parties in order to reach an insight regarding the best course of action.” Uber is currently waging similar legal and regulatory battles with several governments around the world, most notably in Great Britain.