Labour leader Jeremy Corbyn said Transport for London (TfL) had raised "serious concerns" about safety but suggested Uber had an opportunity to "mend its ways".
Unite union boss Len McCluskey said the firm was part of a "horrible, race-to-the-bottom culture".
Mr McDonnell told ITV's Peston on Sunday: "Hand on heart, I don't think I've ever used Uber.
"The company is a disgrace. You have to abide by the law. If the company was outside the law, what could Transport for London do?
"I think the company is at fault here. Four months ago they were told to get their act together and they didn't."
Mr Corbyn said he was "not sure" if he had ever used an Uber "but I don't think so".
He said: "What I think we need with Uber is decent pay and conditions for its staff."
Mr Corbyn added: "There is an issue about safety. Clearly the public as a whole want rapid access to taxis of all sorts, it should be regulated, the public should be protected."
He told BBC's Andrew Marr Show the dispute was "either going to go to court or they are going to mend their ways and make a new application and TfL will have to reconsider it".
"But I do think there has to be proper regulation of the taxi service and licensing all over the country."
Mr McCluskey told Peston on Sunday he had never taken an Uber and added: "I'm one of these people that believes that Uber is part of this horrible, race-to-the-bottom, culture that has developed in this country."
But Streatham MP Chuka Umunna said: "I'm one of millions of Londoners who have used an Uber."
He added: "If they don't comply with the rules, absolutely I won't get an Uber again. But they have got an opportunity here to comply with the rules during this process. "
More than 600,000 people have signed a petition calling for the decision not to grant a new licence to be reversed.
Tom Elvidge, general manager for Uber in London, said the company was prepared to meet with officials after TfL announced the decision not to issue it with a new licence on Friday.
He told the Sunday Times: "We'd like to know what we can do ... to sit down and work together to get this right.
"We haven't been asked for any changes.
"We'd like to know what we can do. But that requires a dialogue we haven't been able to have."
Meanwhile, rival app Lyft is reportedly looking to muscle in on the London market, with a Freedom of Information request revealing the San Francisco-based start-up had held talks with TfL and City Hall in the last year, according to the Sunday Telegraph.