Auckland Council chief operating officer Dean Kimpton said Lime advised that it has identified 155 reported irregular braking incidents that may have been caused by the unexpected locking issue.
Ninety-two of these were in Auckland. Of these, 30 resulted in injury.
Following this explanation, Kimpton said Lime's license had been reviewed and temporarily suspended.
"Myself and Auckland Transport chief executive Shane Ellison have given careful consideration to the most appropriate next steps.
"We have been clear with Lime representatives that the equipment used on our transport network must be safe for use," Kimpton said.
"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."
Lime has said it they will implement a firmware upgrade to address the wheel locking issue.
The firmware update was deployed about 48 hours ago.
"The initial data told us there has been a reduction in unexpected locking, but from an insurance point of view and as a regulator we need to be satisfied that is the case and we are looking for that third party assurance," Kimpton said.
Lime has also been asked to provide incident frequency over the period of the trial, as it relates to this unexpected locking issue; and provide a full update on progress against the licence extension conditions.
Lime has also agreed to report to council and AT on a 48-hour frequency all incidents; and meet weekly with relevant staff to discuss the incident record, analysis and Limes response.
An outside organisation called Exponent is also being brought in to analyse the firmware fix. Exponent is an international root-cause specialist consultancy.
Lime will be paying for the Exponent review as part of their contract.
An independent reviewer will also have full access to Lime's operations and data in order to review its safety management and processes.
A report is due by Monday, then Auckland Council will make a further decision on the temporary suspension.
"Lime has agreed to these conditions and, once we are in receipt of this information, we will make a further decision on whether Lime's licence suspension will be lifted," Kimpton said.
"Lime has this afternoon been notified of this decision and we expect them to begin managing the removal of their scooters as soon as practicable."
Kimpton said he hoped all Lime scooters in Auckland would be disabled and removed within 24 hours.
Kimpton said the suspension was not a reflection on Auckland Council's view of e-scooters.
"We have set out right from the start that e-scooters can be an alternative form of transport that can support what Council and AT want to achieve in terms of its goals around congestion, co2 emissions and a number of other goals we have.
"This is a trial. "We want to solve this. We want action," Kimpton said.
Auckland Transport chief executive Shane Ellison said if Lime does not provide information that meets AT and council satisfaction, then the license will remain suspended.
"The most important thing is that we get the assurance and comfort that those using this equipment are safe," he said.
Auckland councillor Christine Fletcher apologised to everyone who has been hurt while riding Lime e-scooters.
"It is outrageous to me that a temporary license was agreed to for Lime Scooters to operate in Auckland without due consideration being given to all the complex safety issues involved.
"The onus of responsibility must now sit with Lime Scooter to demonstrate the safety of their product," Fletcher said. "They now have the opportunity to do this without an ill-conceived trial taking place potentially injuring even more Aucklanders."
In a statement, Lime's regional general manager for APAC, Anthony Fleo, said the company recently became aware of a software issue that may cause the locking mechanism on the front wheel to engage while on a trip.
"Less than a fraction of a per cent" of all Lime trips in New Zealand had been impacted by this issue.
"We're thankful almost all of the injuries reported are minor scrapes and bruises, although regrettably there are three reports of fractures or sprains, and we have been in touch with each customer to offer our support.
"After immediately decommissioning every scooter in New Zealand that was affected, we began an extensive investigation, working with an independent consulting firm to help determine the cause of the problem.
"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."
While it was unfortunate the council had suspended Lime's permit, the company remained confident in the safety of its scooter 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."
The suspension comes after several e-scooter riders have been left injured after the Lime e-scooters they were riding randomly locked up without warning.
Liam Thompson broke his jaw after a similar incident, which saw him fly over the handlebar and slide over the top of concrete last week.
Mohsen Ansari was speeding down Parnell Rise on a Lime scooter on Tuesday morning when the front wheel locked up and sent him sprawling forwards.
The 40-year-old managed to land on his feet after jumping over the steering column, taking a few steps then rolling on the ground.
"I was going pretty fast and I was trying to slow down then out of nowhere it just locked up and absolutely shocked and I was sent flying.
"I don't know how but magically I took three or four steps before I fell down and just rolled over quickly ... everyone came over to me asking if I was okay."
The ESOL teacher believes years of gymnastics spared him from severe injuries as his movement into a roll was just his reflexes, he said.
Ansari tried to walk off his injury but had horrendous pain in his left knee and was forced to take the day off work and visit the hospital.
Following a series of tests, the doctors revealed they suspected he had ruptured the meniscus in his knee.
Earlier, senior representatives from the San Francisco-based company met with council officers this morning, who gave them until midday to provide information on safety issues following a spate of incidents in which scooters' front wheels locked.
A spokesperson for Lime previously said it "recently" became aware of the operational issue affecting certain scooters and an investigation was under way.
"While the issue is still under investigation, user safety is our first priority and the affected scooters have been removed from circulation."
