There also needed to be more education on proper behaviour, delivered through the Lime phone app or on-site education.
Council community services general manager Simon Pickford said the company would continue to be under the ''microscope''.
The company had indicated the scooters would return by midweek, Pickford said.
As the council could not require Lime to adhere to the conditions, there had to be a good relationship between the two, he said.
"There's a bit of trust involved but we can obviously ask for those reports and it's fair to say we've got Lime under the microscope at the moment.''
There was no bylaw in Dunedin preventing e-scooters such as Lime from operating but options for regulation were being explored and a report would be presented at a council meeting later this month.
AA motoring affairs general manager Mike Noon said the conditions seemed sensible as long as the council was confident the scooters were safe.
"It's new technology. There's been a bump in the road, so to speak.''
Regulation of e-scooters was not necessarily needed but the public and councils needed to be confident they would operate effectively and safely, Mr Noon said.
"Lime might be the first but they won't be the last.''
Lime did not respond to questions before deadline yesterday.