The Wellington regional council will have to consider whether NZ Bus can stay on as a contractor for it after the company was given penalties 17,663 times in five months for failing to comply with its contractural requirements in Wellington.
The bus operator company was contracted by the Greater Wellington Regional Council to deliver 150,000 trips during this time.
NZ Bus received 3207 penalties for cancellations, 8451 for late services and 6005 for using the wrong sized buses.
Councillor Daran Ponter said he had lost confidence in the company.
He said the council will have to re-assess, in the next few weeks, whether it will continue to employ the firm's services.
"The difficulty for us all however is then what? Because while that sounds good to strip off the services from NZ Bus and to allocate them to somebody else, we have to have that somebody else to allocate them to."
Mr Ponter said there is a shortage of drivers but he is not convinced NZ Bus is doing all it can to meet its obligations.
Regional council chair Chris Laidlaw said the council also requiring NZ Bus to appoint a new manager in its Wellington operation "to lift performance and meet its contractual requirements".
Mr Laidlaw said Metlink was reviewing additional services that could be run by other operators.
"There are already a series of planned cancellations in place, alternate operators are providing services on some routes, and double deckers have been rolled out to the eastern suburbs to add additional capacity," he said.
He said the council's immediate focus was to address driver shortages and recruitment strategies.
Wellington city mayor Justin Lester also said the regional council should consider replacing NZ Bus with another contractor.
"They want to get the service up and running, they want the contractor to deliver the services but it will come into question, there'll be a point in time where you say, look can we get someone else in to replace this, because this is simply not good enough."
"This is becoming absurd ... that number of fines, that number of cancellations is simply unacceptable."
NZ Bus has not yet responded to a request for comment.