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. Lime public affairs manager Lauren Mentjox said, "Riders can see the price when they tap on an individual scooter in the app and also when they press scan to ride so they can't hire without seeing the per minute rate before they ride."
But 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, 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."
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 subscription-model company such as Lime to notify customers of any price increase (Lime objected to the "subscription-model description but Wison stuck by it. She noted that Lime requires customers to sign up and pay in advance, and uses the term "subscription fees" in its own turns and conditions" (Lime said the terms and conditions reference was to a subscription-based service not available in NZ).
A price increase was a significant change to the terms and conditions of service and Lime should have notified customers directly, 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.