Under the bylaw, e-scooter companies also had to abide by a code of practice, that was developed by council staff, to address concerns that were raised about e-scooters being parked in ways hazardous to pedestrians.
Thirteen cents from each ride goes to the council to cover monitoring and administration costs.
Lime public affairs director Lauren Mentjox said that after "careful consideration and weighing up many factors", Lime had made the difficult decision to not apply for a new permit in Dunedin.
"It has been a challenging but rewarding process to build a successful scooter share programme in Dunedin, and residents and visitors will continue to benefit from Lime's work to change the way people travel in the city.
"We are really proud to have brought micromobility to Dunedin and serve so many local people as the city's leading scooter provider.
"We also created local jobs, leased a warehouse, and contributed directly to other businesses and services in the city.
The micromobility industry was constantly changing and Lime might look to come back "when the timing is right", she said.
The green scooters first hit Dunedin streets in January 2019 and since then more than 90,000 users have taken over 750,000 trips in Dunedin, replacing more than 175,000 car trips.
"We have enjoyed serving Dunedin and we thank our riders, community stakeholders and Dunedin City Council for the opportunity," Mentjox said.
But it seems Lime's departure won't mean fewer e-scooters in the city's streets.
Neuron Mobility, which launched in February this year, has announced a significant expansion to its service in Dunedin, from July 1.
It received a permit to double its fleet to 500.
Ceo Zachary Wang said the he was delighted Neuron had been chosen as the sole e-scooter operator in the Dunedin.
"This new permit will allow us to invest more in Dunedin, including the creation of over a dozen new jobs.
"We thank Dunedin City Council for their continued trust and support."
He said the safety of its riders and the community was taken seriously and a few weeks ago, the company launched New Zealand's first third party insurance cover for e-scooters.
"This has set the standard when it comes to protecting riders and the public," he said.
