Bus firm The Big Lemon has been forced off the road after costs spiralled out of control.
The eco-friendly company, which runs its vehicles on recycled cooking oil, has had to scrap its services after its city rival launched a price war by slashing fares.
The Big Lemon was founded as a community interest business to provide cheap and eco-friendly travel but low passenger numbers and competition from Brighton and Hove Bus and Coach Company has forced it off its route between Brighton and Falmer.
Boss Tom Druitt, a former care home manager, has refused to wind up the firm and is hoping to relaunch a service in a different part of the city next year.
Mr Druitt decided last week to pull buses off the number 42 route but planned to keep the service running until Christmas.
However, some of the company's drivers decided to quit after being given the news and the company was forced to stop all services on Friday.
Mr Druitt said: "The service was deemed not to be viable in the long term.
"We had to agree on a date when we would deregister the route.
"The problem was that when it became apparent to some of the team they were going to be made redundant because of the service not continuing they decided to pull out immediately.
"With the ones that were left it was impossible to run the service." The Big Lemon bus company was launched in September promising to source its recycled cooking oil fuel from ethical suppliers.
Last month the company announced it was having difficulty with passenger numbers and needed 20 per cent more to break even.
The company cut its timetable to resurrect its fortunes but had limited success.
Mr Druitt said: "We are very grateful for the passengers that did use the service. It was a lot of fun running it and having very friendly passengers. A lot were dedicated Big Lemoners."
The decision to stop the service was made hours after The Argus revealed Brighton and Hove Bus and Coach Company was to slash its fares.
Roger French, managing director of Brighton and Hove buses, denied the move to cut weekend day savers from £3.20 to £2 was aimed at putting the Big Lemon out of business.
Mr Druitt admitted the competition from Brighton and Hove was tough because of the number of its buses but said other factors had played a role such as driver shortages through illness and costs associated with licences.
He vowed to fight on and said: "I am committed to trying to find something we can do that's useful.
"I have put a lot of time and effort in over the years to get something going and I am not in the mood to throw in the towel.
" We have tried, the service didn't work, so we'll have to see what will work."
The company still had buses available for private hire, he said, and he promised to give refunds to passengers who have bought passes and weekly tickets.