Auckland Council has decided to temporarily suspend the e-scooter trial with Lime, after safety concerns about the brakes.
Lime, including its director of government affairs for Asia Pacific, met with the council and Auckland Transport officials today.
The council said Lime's licence would be temporarily suspended, while it awaited more information from the company about the safety problems.
In a statement to RNZ, Lime has apologised to the Auckland community and said the decision was unfortunate.
"While it's unfortunate City Council has decided to pause our permit to gather additional information, we remain confident in the safety of our service.
"We apologise to our riders and the Auckland community for this issue and the disruption in service.
"We remain committed to being a safe and reliable last-mile solution and are confident that once we provide additional information to the City Council in the coming days, we will be back on the streets of Auckland soon."
Chairperson of the planning committee Chris Darby has confirmed to Checkpoint the scooters will be physically removed from the streets tonight.
Dundedin City Council general manager community services Simon Pickford said Lime had assured staff that the scooters would also be taken off the city's streets too.
Lime acknowledged to the council there had been reports of similar issues in Dunedin, and said it would be working on another report on that region to provide to the council.
Mr Pickford said there were no rules to prevent Lime scooters from operating in Dunedin and safety issues were a matter for the company and NZ Transport Agency.
"Many cities are dealing with new modes of transport, such as e-scooters, and we're looking at what options are available to keep pedestrians safe. Options will be reported to the council once work is complete."
`Safety is not negotiable' - council boss
Meanwhile, Auckland Council chief operating officer Dean Kimpton said the council had been clear with Lime that its e-scooters used must be safe for use on the public transport.
"The safety of people using e-scooters and those that share the environment with them is our number one priority. While we appreciate the amenity that e-scooters offer as an innovative transport solution, safety is not negotiable."
Earlier this week, Auckland Council revealed that it had issued an ultimatum for the company to prove its fleet were safe and a software glitch had been resolved.
Several people have been catapulted off the scooters by a braking fault that randomly locks up the wheels.
A braking issue with the scooters in Switzerland prompted the company to pull its fleet there.
Lime advised the council of 155 reported irregular braking incidents that may have been caused by the unexpected locking issue, 92 of these were in Auckland. Of these, 30 resulted in injury, of which 19 were in Auckland.
Auckland Council and Auckland Transport have repeatedly sought assurances from the company that there will be no further malfunctions.
"Auckland Council has formally written to Lime twice this week to request urgent updates to allow any next steps from a licencing perspective to be decided on," its chief operating officer, Dean Kimpton, said.
Writing to the company on Wednesday, Mr Kimpton acknowledged that Lime believed the issue had been caused by a software glitch and that they had rolled out an update to solve it.
"Less than a fraction of a percent of all Lime trips in New Zealand have been impacted by this issue, specifically 0.0086 percent. While a small fraction of the more than 1.8 million scooter rides to date, even one incident reported is too many," Lime said in a statement to RNZ.
In Lime's statement, it said that after decommissioning the affected scooters, it began an investigation with an independent consulting firm to find the cause.
"We have deployed a firmware update to resolve the wheel-locking issue, and have seen a material reduction in the number of incidents reported of this nature in New Zealand since the update rollout."
Lime said they were investigating one unconfirmed incident that was caused by the excessive braking issue since the update rollout occurred.
But Mr Kimpton wanted urgent assurances that it had worked.
"Given the significance of this issue, and that it has occured elsewhere - not just in New Zealand - 48 hours is the maximum time that Auckland Council and Auckland Transport are prepared to wait for confirmation that the issue is resolved."
He gave Lime until midday today to provide a formal written response providing proof that the software update had worked, or failing that, what urgent action Lime would take to remedy it.
"If Auckland Council and Auckland Transport do not receive that assurance by that time and are not comfortable with Lime's efforts to ensure safety and wellbeing, then we will need to consider our options in relation to Lime's licence."
He said the council had the right to revoke their licence if deemed necessary.
Decision looms over scooters in Christchurch
The temporary suspension of Auckland's e-scooter trial may help decide the future of Lime scooters in Christchurch.
Councillors there will receive a report on Thursday about the city's own Lime trial. They will then decide whether to extend the company's licence to operate.
The report has already been written but new information from Auckland will also be discussed by councillors.