Electric Bicycle and Scooter Rental Litigation

FEATURE

ANDREY_POPOV/SHUTTERSTOCK.COM

Electric Bicycle and Scooter Rental Litigation

BY MADELINE E. MCNEELEY

W ith the creation of Bird, Lime, Spin, and other bikeshare and scooter-share services in the past few years, the sight of e-scooters cruising down sidewalks and clusters of electric bicycles on street corners in large cities and college towns is increasingly common. Like Uber, Lyft, and other companies trying to use Silicon Valley-style tactics to “disrupt” established industries,[i] the electric bike and scooter rental companies have largely pursued a guerilla strategy of appearing in cities unannounced and beginning operations without seeking permission from the local governments or concerning themselves with how their services fit into existing transportation environments and safety regulations. As lawmakers work to catch up, personal-injury litigation may prove to be the first significant test of the companies’ business practices and the leading edge of the effort to ensure the companies operate safely and responsibly.

The devices themselves are not new. Electric bicycles and electric personal assistive mobility devices (EPAMDs),[ii] such as electric scooters and Segway PTs, have been available for years. Where Lime, Bird, and their competitors have innovated is in offering these shareable dockless mobility devices for so-called “last mile” rental by leaving them unattended on the street and connecting them to the internet. A customer who comes across one can rent it via a smartphone app, then simply leave it wherever he or she finishes using it. The companies recruit local individuals to collect and charge the devices, and some companies engage other locals to perform inspections, maintenance, and repairs.[iii]

This modus operandi raises a number of safety concerns:

Physical Hazards. Scooters and bikes can fall over or be dropped so they block sidewalks and ramps, causing tripping hazards or obstructing users of wheelchairs and medical scooters. Unattended devices can also fall into the road, potentially obstructing traffic and causing collisions.

Road and Pedestrian Safety. Using motorized scooters and bicycles on crowded sidewalks could lead to injury of the rider or a pedestrian, but taking the devices on fast-moving public roads could cause collisions and serious harm. Municipalities may vary in availability of dedicated bike lanes, whether e-device riders are permitted or required to use them, and how well the municipalities have publicized the rules for use of sidewalks, bike lanes, and travel lanes.

Use of Protective Equipment. At least some of the rental apps encourage users to wear helmets and may even offer discounts on the purchase of one, but most bikeshare and scooter-share companies do not provide helmets with the devices, and potential customers are unlikely to carry helmets with them at all times just in case they decide to rent one.

Lack of Training. Electric bicycle and scooter rentals are likely to be spontaneous, perhaps by customers who don’t use them often and may not be familiar with the laws surrounding them. By design, no one associated with the company is on site to facilitate the rental, so no one is there to ensure the customer has appropriate protective equipment, understands how to use the vehicle safely, or knows the pertinent rules of the road.

Inspection and Maintenance. It is unclear how frequently and thoroughly the scooters and bicycles are inspected or how well the companies screen, train, provision, and supervise their mechanics. One self-identified “Bird Mechanic” has claimed that he was approved after a brief phone call with a representative, watching some online “how-to videos,” and answering questions about the videos afterward. That same mechanic criticized the quality of the tools Bird provided him and observed that other mechanics might not have the skills or patience to do the job properly.[iv]

The Georgia General Assembly entertained legislation in the 2019-2020 session that would have put some statewide regulations of these devices in place and would have addressed cities’ ability to regulate their use. House Bill 454 went through significant changes before passage, so the version signed into law primarily allows electric bicycles with top speeds of 20 miles per hour and EPAMDs to use bicycle paths (though local authorities and state agencies may make exceptions regarding electric bicycles),[v] clarifies that electric bicycles are subject to the same rights, duties, and equipment requirements as nonpowered bicycles,[vi] and imposes age restrictions and helmet-usage requirements on the class of electric bicycles with top speeds of 28 miles per hour.[vii] Importantly, violation of the helmet provisions “shall not constitute negligence per se nor contributory negligence per se or be considered evidence of negligence or liability.”[viii]

This means that, at present, most regulation of these rental companies and of the safety concerns presented by electric scooters remains largely in the hands of local governments. Some Georgia communities, such as Athens, Alpharetta, and Savannah, banned the rentals altogether, either permanently or until they could enact satisfactory ordinances.[ix] Other cities, including Atlanta, allowed the devices to proliferate while they devised new regulatory schemes.[x] As an example of the rules being considered by Georgia’s cities, the Atlanta City Council adopted Ordinance 18-O-1322 on January 7, 2019.[xi] The ordinance sets forth a permitting scheme for the companies, mandates that the companies carry liability insurance and indemnify the city, and requires them to educate users about applicable laws and to encourage helmet usage. As for the customers, Ordinance 18-O-1322 forbids physically holding cell phones while operating the devices, restricts where the devices may be parked and requires parking them upright, forbids driving them on sidewalks, and permits use on roads and in bike lanes.[xii]

Of course, wrecks and injuries do not wait for municipalities and state legislatures to work through their deliberative processes; in fact, they often are the catalyst for those processes to take place. Mere months after Atlanta enacted its initial Shareable Dockless Mobility Device ordinance, a series of serious collisions—including four fatalities—led the city to temporarily ban e-scooter and e-bike rentals between the hours of 9:00 p.m. and 4:00 a.m. while it considers additional long-term measures.[xiii] The city is asking the companies to disable rentals during the hours of the ban, which a representative of Lime said is “a reasonable step as a temporary measure,” though he disapproved of the potential for a permanent nighttime ban.[xiv] In the meantime, while litigators cannot act before an incident takes place, they are better positioned to move quickly afterward and to delve into the particulars of the companies’ potentially harmful conduct. At least one personal-injury suit has already been filed against an e-scooter rental company in Georgia, in this case involving alleged product defect and negligent maintenance.

Clopton, et al. v. Bird Rides, Inc., et al. was filed in Fulton County State Court on March 8, 2019, and has since been removed to the U.S. District Court for the Northern District of Georgia as case number 1:19-cv-01728. A search of PACER[xv] shows several other cases being defended in other federal circuits, mostly in California’s district courts, by Bird Rides, Inc., Skinny Labs, Inc. (the entity that founded Spin before being purchased by Ford Motor Co.), and Neutron Holdings, Inc. (the company behind Lime). More litigation against these companies is sure to follow.

As trial lawyers begin reviewing these potential cases, additional issues to consider will be the applicability of insurance and identifying a defendant against whom a judgment can be obtained. Customers’ own automobile and homeowner insurance policies might exclude coverage for incidents that occur while on a rented electric bike or EPAMD.[xvi] If the plaintiff was injured by someone who left the scene—such as when injury results from a renter or charger negligently leaving a scooter so that it blocks a sidewalk, ramp, or roadway—the victim might have difficulty identifying and locating the tortfeasor in the first place. While the rental companies’ own liability insurance should cover incidents caused by faulty devices, the extent to which their insurance would cover customers’ negligence, the negligence of people performing charging or maintenance work, or other instances of bodily injury or property damage is still largely untested. Moreover, at least one rental agreement purports to require customers to indemnify the company and the municipality from virtually all liability, to agree that the company will not be liable to customers for their own injuries, and to submit their claims to binding arbitration.[xvii] The indemnification clause may complicate issues of fault, apportionment, and insurance coverages if, for instance, a company operating in Atlanta fails or refuses to deactivate rentals during the hours of the nighttime ban and a customer negligently injures someone during those hours. Here, too, future litigation will test the extent and strength of the waivers and indemnification provisions the companies are including in their contracts.[xviii]

The explosion of shareable dockless electric bicycle and electric scooter rental services across the country has created a liability minefield that legislation and regulation are necessarily slow to clear. Personal-injury lawyers will be at the forefront of testing the rental companies’ liability shields and pushing them to improve safety for users and third parties. Lawyers pursuing these cases should be careful to check for relevant municipal ordinances, examine operators’ and clients’ insurance policies for e-vehicle exclusions or riders, and review the rental agreements—which may be separate from the apps’ terms of service—that are posted on the websites and linked through the apps. 

ABOUT THE AUTHOR
Madeline McNeeley is a partner in the Atlanta office of Harris Lowry Manton. She advocates for individuals and families in products liability, wrongful death, catastrophic personal injury, appellate, and other civil litigation. Molly is a graduate of the GTLA LEAD Program and can be reached at molly@hlmlawfirm.com.

 

FOOTNOTES
[i] In fact, Uber purchased Social Bicycles, LLC, the entity that operates Jump, in 2018, and Lyft now offers its own scooter-share service, as well.  Aarian Marshall, Uber Acquires the Bike-Share Company Jump, Wired (Apr. 9, 2018), https://www.wired.com/story/uber-acquires-jump-bike/; Marrian Zhou & Dara Kerr, Lyft Is Rolling Out Its First Electric Scooters Today, CNET (Sep. 6, 2018), https://www.cnet.com/news/lyft-is-rolling-out-its-first-electric-scooters-today/.

[ii] “‘Electric personal assistive mobility device’ or ‘EPAMD’ means a self-balancing, two nontandem wheeled device designed to transport only one person and having an electric propulsion system with average power of 750 watts (1 horsepower) and a maximum speed of less than 20 miles per hour on a paved level surface when powered solely by such propulsion system and ridden by an operator who weighs 170 pounds.”  O.C.G.A. § 40-1-1(15.4).

[iii] Thomas Wheatley, Bird Invasion: Atlanta’s Electric Scooters Are Fun, Dangerous, Exciting, Annoying, and Unstoppable, Atlanta Mag. (Aug. 7, 2018), https://www.atlantamagazine.com/news-culture-articles/bird-invasion-atlantas-electric-scooters-are-fun-dangerous-exciting-annoying-and-unstoppable/; Chris T., Bird Mechanic Review: What It’s Like to Fix Bird Scooters, The Rideshare Guy (July 20, 2018), https://therideshareguy.com/how-to-become-bird-mechanic.

[iv] Chris T., supra note 3.

[v] O.C.G.A. § 40-6-303(a)(1), (a)(2); see O.C.G.A. § 12-3-114(1)(B), (1)(G); O.C.G.A. § 40-1-1(6.1), (6.2).

[vi] O.C.G.A. § 40-6-302(c), (d); O.C.G.A. § 40-6-301.

[vii] O.C.G.A. § 40-6-303(b), (c)(1), (c)(2).  For additional discussion of the enacted provisions of House Bill 454, see Madeline E. McNeeley et al., Commercial Transportation, Annual Survey of Georgia Law, 71 Mercer L. Rev. (forthcoming 2019).

[viii] O.C.G.A. § 40-6-302(c)(5).

[ix] Wheatley, supra note 3; Ben Brasch, Alpharetta Bans E-scooters, Becoming First in North Fulton to Do So, AJC.com (June 12, 2019), https://www.ajc.com/news/local/alpharetta-bans-scooters-becoming-first-north-fulton/; Lee Shearer, Athens-Clarke Commission Grounds Bird Scooters, Athens Banner-Herald (Dec. 5, 2018), https://www.onlineathens.com/news/20181205/athens-clarke-commission-grounds-bird-scooters; Lee Shearer, Athens-Clarke County Weighs Options to Deal With Bird Scooters, Athens Banner-Herald (Oct. 19, 2018), https://www.onlineathens.com/news/20181019/athens-clarke-county-weighs-options-to-deal-with-bird-scooters.

[x] Wheatley, supra note 3.

[xi] Available at https://www.atlantaga.gov/home/showdocument?id=39601.

[xii] See also Shareable Dockless Mobility Devices, City of Atlanta, GA, https://www.atlantaga.gov/government/departments/shareable-dockless-mobility-devices.

[xiii] Ross Terrell and Sophia Saliby, Atlanta Puts Nighttime Ban On E-Scooters, GPBNews.org (Aug. 8, 2019), https://www.gpbnews.org/post/atlanta-puts-nighttime-ban-e-scooters; Shareable Dockless Mobility Devices, supra note 12.

[xiv] Terrell and Saliby, supra note 13.

[xv] Search conducted July 25, 2019.

[xvi] National Association of Insurance Commissioners, Consumer Alert, Scooter Sharing Creates Insurance Implications for Consumers, NAIC.org (Sept. 2018), https://www.naic.org/documents/consumer_alert_electric_scooter.htm.

[xvii] Bird Rental Agreement, Waiver of Liability, and Release (effective Apr. 30, 2019), https://www.bird.co/agreement.

[xviii] Cathy Bussewitz, Scooter Riders Advised to Avoid Insurance Pothole, Insurance J. (June 28, 2019), https://www.insurancejournal.com/news/national/2019/06/28/530715.htm.

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