A taxi company has lost a government contract transporting kids with disabilities to and from school - just two weeks after it took over the service.

It follows a fortnight of students being left stranded and distressed because of problems with the switch to the new provider, the Auckland Co-operative Taxi Society.

The Ministry of Education has promised a review of what went wrong, although the details are yet to be decided.

The Herald has reported on vulnerable children being dropped to school as late as 11am, sometimes even taken to the wrong school. Others have been dropped off unsafely, or not picked up at all.

This morning the ministry wrote to central Auckland schools, saying Co-op Taxis had "agreed that they are not able to provide the service that we require".

"We have mutually agreed that they will relinquish this cluster."

"I apologise unreservedly for the uncertainty and disruption that you have experienced," the letter from the ministry's group manager for school transport, James Meffan, said.

Sharyn Pilbrow, the ministry's acting head of education infrastructure service, confirmed Co-op had given up the contract and it would go to Cross Country Rentals from next Wednesday. A phased transition period would end on August 17.

"Our priority is to minimise any further stress and disruption to our SESTA students," Pilbrow said.

Auckland staff were in constant communication with both providers and the schools.

The ministry would not release details of the contracts, citing commercial sensitivity. It also did not answer a question about whether the south Auckland contract would be returned to the previous provider Go Bus.

Co-op Taxis chairman Jacob Patel said he could not say much because of the terms of Co-op's contract with the ministry, but it was a hard decision to let the job go.

"We regret we could not honour the contract. We apologise to those parents who had hardship from us not picking up their children on time."

The company would continue to work hard to serve children in the other SESTA clusters to the best of its ability, Patel said.

'Our supplier has not met their contractual obligations'

Co-op Taxis won the contracts for south and central Auckland in March, and started the job last Monday, the start of Term 3. It already held SESTA contracts for west and east Auckland.

By midday Monday more than 150 students - around 12 per cent of the total across Auckland - had had problems, and the ministry sent out apologetic emails to parents and schools.

Co-op Taxis has come to a "mutual agreement" with the Ministry of Education to end its Auckland central SESTA contract. Photo / File

In an unusually strong public statement last week the ministry said it was "disappointed that our SESTA supplier has not met their contractual obligations".

Under the terms of the contract, all students were to be provided with a dedicated driver, and drivers were to meet with schools and families to confirm pickup details before Term 3 started.

Co-op had assured the ministry these would be followed, but often they were not.

For some of the most high-needs children it has been two weeks from hell. One father told the Herald his son had been vomiting every day from anxiety.

His son used to go to school with the same driver every day, in a van that had a special safety harness. But since Co-op took over different drivers turned up at the wrong time, and usually with the wrong type of vehicle. He had taken a week off work to transport his son and other children to school.

The Herald has also heard first-hand of two students being dropped at the wrong school, including a boy with autism spectrum disorder who used the SESTA service for the first time ever last week.

His mother said because he struggled to communicate, he could tell the driver it was the wrong place but couldn't explain where he was meant to go. The boy was able to call his mum to pick him up; he is now too anxious to use the taxi service. His mother is still unsure who was to blame for the incorrect information being supplied.

Last week Mt Roskill MP Michael Wood wrote a letter to Minister of Education Chris Hipkins asking him to urgently deal with the problems raised by the switch. Hipkins confirmed his office had received the letter and he had noted it with the Ministry of Education.

'I've been praying': Parents overjoyed taxi provider is changing

Mum Mel Watson told the Herald, through tears, that she was "elated" the contract had been returned to Cross Country Rentals, saying "this might be what it feels like to win a gold medal".

Her daughter Paris Parker, who has Down Syndrome, attends the MacLean Centre at Mt Roskill Grammar.

Mel Watson with daughter Paris Parker, 20, who uses Specialised School Transport Assistance (SESTA) to get to and from school at Mt Roskill's MacLean Centre. Photo / Supplied

She's been late to school every day, as each day a different driver would pick her up and take her on random routes across town to get other students - meaning she spent up to 90 minutes in the car each way.

"Through all this, Paris has been fine because she will just get in anyone's car. That's the problem ... She's okay, it's me who's been worrying myself sick.

"It's a huge weight off my shoulders knowing [the service] is back in the hands of people who are actually going to look after these kids and not treat them like a delivery."

Zelita Mahoney, whose son Dom has Down syndrome, was "very, very happy" to hear Cross Country had won back the contract.

The 15-year-old lives in Glendowie and attends Marcellin College in Royal Oak. He had a strong relationship with his previous driver and the new service was not the same, Mahoney said.

"Our new driver is a gentle man. It's not him - it's the system. He's been looking after Dom very well. But I still feel Dom has a sad face every morning - he used to be in the van with his good friends."

Dom's former driver had taken a job with Co-op Taxis but Mahoney hoped she would be able to pick up her old Cross Country run.

And she wanted a public apology from both Co-op Taxis and the Ministry of Education.

"It definitely cost us our wellbeing and mental health. It wasn't good enough. I've been praying for God to do something about it."