The ride-sharing company which has shaken up passenger transport in more than 600 cities world-wide is launching in Dunedin and Queenstown in May.

Photo: RNZ / Diego Opatowski

Uber will also launch its Uber Eats food delivery service in Dunedin at the same time.

The move has been mooted for the past four years.

After taking hold in Auckland, Wellington and Christchurch, Uber launched in Hamilton and Tauranga two months ago.

The service now boasts 400,000 users in New Zealand, and 5000 drivers.

The announcement comes the same day Uber's self-driving vehicle testing programme in the United States was shut down after one of its vehicles killled a pedestrian.

Uber's New Zealand general manager Richard Menzies said Dunedin and Queenstown were fantastic markets which should embrace its service.

The large tourism sector in Queenstown, and the 20,000 strong student population in Dunedin should mean strong demand for rides, Mr Menzies said.

"Many people find it hard to get home from the Octagon on a Saturday night, so it's great to give people a safe, reliable alternative," he said.

Dunedin seems keen

On Dunedin's streets today most people were looking forward to it

"I've just moved down from Wellington and used it there heaps ... really excited to see it down here, said one woman.

"Yeah, Uber is just really good. I was just in Australia and used it there - so much cheaper, easier to organise," one man said.

But there are also critics, especially in the taxi industry.

"I used to be a taxi driver so I don't like Uber. We had to go through all the rigmarole of getting police vetted and knowing where you are going and they don't have to," another man said.

Taxi companies around the world have been crying foul against their upstart competitor.

Uber has had court battles around the world, and a massive privacy breach in 2016.

The Otago president of the Hospitality Association Mark Scully said it was inevitable Uber would arrive in Dunedin, and the city needed the extra transport capacity.

Dunedin's transport could not cope well with big events and Uber would help on busy nights and weekends, Mr Scully said.

Students would probably be Uber's main drivers and main users, he said.

"Queenstown congestion might get worse"

Queenstown might be a harder market to crack.

The taxi industry there has been described as the wild west.

And the rapidly-growing resort town has been plagued with congestion problems. It is trying to attack the problem with $2 flat bus fares and parking price hikes.

Four months ago the company Go Bus launched its own ride share service and app Savy in Queenstown, a shared ride van system with flat $7 fares.

Uber could make Queenstown's congestion worse, reckons Russell Turnbull, Go Bus's business development director.

"Uber drivers do tend to circulate around, looking for rides, and that's something that does create congestion, it doesn't solve it," Mr Turnbull said.

"We're watching them, we don't fear them, but we do question if they are the right thing for Queenstown," he said.