Lime should have been more upfront about increasing its prices, a consumer watchdog says.
In the past week the scooter hire company increased its prices in New Zealand from 30c per minute to 38c, an increase of about 26%.
It still costs $1 to hire the scooter and the minute rate is then applied.
Riders are able to see the cost per minute using the company's app when they go to hire a scooter. It is only a recent addition to the app and people using an older version were still able to hire a scooter without seeing the cost per minute.
There were no other notifications of a price increase, despite Lime having access to customer's emails and the ability to send messages directly to riders.
In a statement, Lime public affairs manager Lauren Mentjox said the company had increased its pricing across New Zealand in the last week.
Users were always able to see the per-minute rate of scooters by opening the app and tapping an individual scooter, she said.
"We've adjusted our pricing to ensure that we can continue to offer excellent operational support where riders demand it most."
Ms Mentjox did not directly respond to a question about whether customers had been satisfactorily notified about the increase.
In its own terms and conditions Lime says in the event of a price increase it would post the new pricing on its app and attempt to notify customers in advance by email.
Consumer NZ head of research Jessica Wilson, of Wellington, said she expected a company such as Lime to notify customers of any price increase.
A price increase was a significant change to the terms and conditions of service and Lime should have notified customers directly, Ms Wilson said.
Customers should have been given reasonable notice so they could choose to use the credit they had or to put in a cancellation, she said
"In this case, Lime says in its own terms and conditions it would notify customers of any increase, so it has an obligation under those."
The way the price increase was handled also raised potential issues under both the Consumer Guarantees Act and the Fair Trading Act.
Since the service was launched in Dunedin in January more than 300,000 trips have been made by more than 52,000 riders.
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Comments
At a minimum cost of $23.80 per hour to hire a scooter hopefully this is the beginning of the end for them. No loss in my mind.
L.I.M.E. Low Immensely Maleficent Enterprise
It is genuinely cheaper to take a bus, a taxi, an Uber or to hire a car.
38 cents per minute is $22.80 per hour, or $547 per day.
Given the general state of the average kiwi's health, if those options aren't suitable, I'd suggest walking or riding a bicycle might do us all a favour.
I wonder what, if any, ACC levy Lime are paying? Whatever industry they've been bundled in with must be seeing new levy increases soon too, given the costs associated with Lime accidents.
I can see how the innovative product is appealing, but in terms of a global corporate coming into NZ and syphoning out money, with little regard for the impact, I'm not at all impressed.
Your cost comparisons are totally irrelevant.
Nobody is going to hire one for a day, probably not even an hour. I suspect most rentals are for a very short time in specific locations.
The average rental period is probably measured in minutes, making them a lot cheaper and a lot more convenient than buses or taxis.
Dunners, it was a price comparison, not a cost comparison. But the exercise was to highlight price versus cost. Of course no-one is going to hire a car instead.
The point is, that they are priced well beyond what it costs to buy, charge and maintain the vehicle, when compared to rental cars. Yes, they're convenient and cup-of-coffee priced to use, but this company is gouging us in terms of dollars, safety and medical costs.
I went through to the 24hr book sale in the wee hours on Saturday morning and was surprised to see the amount of Lime scooters scattered around the town, off the one way. There was quite a pile by one of those sheep things. I thought they were supposed to be removed overnight?
Lime has increased their prices.......now the world will end ahhhhh!