Bus contractor U-Go Mobility have been given until Tuesday July 25 to show why it's contract for services in St George and Sutherland Shire shouldn't be terminated.
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The acting secretary of Transport for NSW Howard Collins wrote to the company on Friday July 21.
"We understand that U-Go has cancelled approximately 95 trips each weekday since service commencement (July 1)," Mr Collins wrote.
"Since the new school term commenced on 17 July 2023, U-Go has cancelled approximately 430 trips each weekday.
"TfNSW is extremely concerned about U-Go's performance of the services to date and its ongoing ability to provide the services under the contract in accordance with the required service levels.
"TfNSW is taking this matter very seriously and considering all of its options under the contract, including but not limited to its rights to terminate the contract (for service default, harm to TfNSW's reputation, other termination events or for convenience) as well as exercising its step-in rights and bringing an action for damages for breach of contract.
"Accordingly, TfNSW requires U-Go to urgently provide information to TfNSW to demonstrate what steps and remedial measures it has taken and plans to take and by when it will remedy the service defaults to satisfy TfNSW that it has the ability to provide the services under the contract in accordance with the required service Levels."