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Bird Law: The Emergence of Electric Scooter Companies and Their Potential Legal Repercussions

They appear, as if by magic, overnight and in swarms.  With little to no warning, they descend upon urban populations, leaving city officials scrambling to find solutions.  Although it may sound like something out of an Alfred Hitchcock horror flick, the scene described actually applies to the latest transportation business craze: electric scooters (e-scooters).  As with every new technology, the emergence of the e-scooter has been met with both great excitement and vast critique.  Proponents of e-scooters believe that they represent a fun, fast, and easily accessible innovation that will lessen urban congestion and environmental waste. However, others criticize them as safety hazards that may actually lead to greater city congestion. Whether you’ve jumped on the e-scooter bandwagon or not, it’s hard to see e-scooters disappearing anytime soon.  This blog post is comprised of the following three parts: how e-scooter companies function; safety issues; and how various cities and states are dealing with the sudden appearance of hundreds, if not thousands of scooters.

Bird’s Eye View: The Electric Scooter Business

In 2017, there were more than 40,000 car related deaths in the United States alone.  ((2017 Estimates Show Vehicle Fatalities Topped 40,000 for Second Year Straight, Nat’l Safety Council, https://www.nsc.org/road-safety/safety-topics/fatality-estimates)) For Bird, one of the most prominent e-scooter companies, part of its stated mission is to create “safer and more livable cities” by removing a portion of automobiles from the transportation equation.  ((Kirk Mitchell, Scooter companies Bird, Lime among defendants in class action lawsuit filed in California, Denver Post (Oct. 23, 2018, 1:33 PM), https://www.denverpost.com/2018/10/23/dockless-scooters-bird-lime-injury-lawsuit/)) If e-scooter companies successfully proliferate, Bird’s goal may very well be attainable.  As of 2017, nearly 60% of car rides were for distances of less than 6 miles. ((Nat’l Household Travel Surv., Distance (2017), https://nhts.ornl.gov/vehicle-trips)) Although each e-scooter can go upwards of 20-30 miles in one charge, most trips are shorter than that and an abundance of the scooters could lessen the need for auto transportation on such trips. ((Umair Irfan, Electric scooters’ sudden invasion of American cities, explained, Vox (Sept. 7, 2018, 12:24 PM), https://www.vox.com/2018/8/27/17676670/electric-scooter-rental-bird-lime-skip-spin-cities))   In terms of Bird’s hopes for more livable and greener cities, the Environmental Protection Agency has stated that were drivers to walk or bike “for half of all car trips shorter than a mile” that they would prevent “2 million metric tons of carbon dioxide omissions” from entering the atmosphere. ((Id.)) Seemingly, replacing car rides with e-scooter trips would go a long way towards achieving that goal.

For those who haven’t yet encountered an e-scooter, their design is simple.  Whether they are owned by Lime, Spin, Bird, or any other of several companies in the e-scooter game, these devices resemble the two-wheeled scooters of almost every millennial’s childhood. The basic design is akin to a razor scooter with an attached motor to create a self-propelling unit that goes about 15 miles per hour. ((Id.)) Those who wish to use the scooters simply download an application onto their smart phones and enter a credit card number. ((Id.)) The app then allows them to see which scooters are nearby, as well as each scooter’s available charge. ((Id.)) Once a user has located an available device, they scan their smart phone to unlock the scooter and begin their travels. ((Id.)) Each scooter is equipped with GPS tracking units and 4G data connections to keep tabs on the device and, further, to determine distance traveled. ((Id.)) Similar to Uber and Lyft, this allows the app to automatically charge users for each trip.

To keep e-scooters up and running, startups have created an entire network tasked with scooter maintenance, including engineers to track the scooters, support staff to answer customer questions, and technicians to whisk away broken scooters and mend their wings. ((Id.)) Perhaps the most peculiar members of the Bird team, though, are the scores of everyday citizens who act as “Bird Hunters,” searching the streets for scooters in need of charging. ((Enrique Dans, Electric Scooters And Collateral Ecosystems: Bird Hunters, Forbes (May 22, 2018, 11:49 AM) https://www.forbes.com/sites/enriquedans/2018/05/22/electric-scooters-and-collateral-ecosystems-bird-hunters/#f74e2ab28834)) After applying to be a Bird charger, these “hunters” gain access to a portion of the app that displays depleted scooters. ((Id.)) Bird then sends its hunters special charging kits which can charge each scooter within 3 to 5 hours. ((Harry Campbell, Becoming a Bird Charger – Charging Electric Scooters (REVIEW), The Rideshare Guy (Mar. 28, 2018), https://therideshareguy.com/i-signed-up-to-be-a-bird-electric-scooter-charger-heres-what-its-like-2/)) Through this charger program, Bird has essentially created a freelance ecosystem whereby individuals can make anywhere between 5 to 25 dollars per scooter per night. ((Megan Rose Dickey, Silicon Valley scooter wars, TechCrunch (June, 2018), https://techcrunch.com/2018/06/09/silicon-valley-scooter-wars/)) The amount any hunter can earn is dependent on how difficult it is to find each scooter and the level to which it needs to be charged. ((Id.))

Prior to the onset of e-scooters, billions of dollars had already been invested into revolutionary transportation companies; however, up to now, shorter rides had largely been ignored. ((Irfan, supra note 4.)) The closest comparison would, again, be rideshare apps such as Lyft and Uber but those cost substantially more to go the same distance. An Uber ride, for example, costs users a base fee of 1 to 3 dollars and an average of 2 dollars per mile. ((The Comprehensive Guide: How Much Does Uber Cost?, Ridester (Aug. 10, 2018), https://www.ridester.com/uber-rates-cost/)) This means that for a trip of 2 miles, Uber users are paying at least 5 to 7 dollars per ride. ((Id.)) Bird, on the other hand, charges a base rate of 1 dollar and then adds 15-20 cents per minute traveled. Traveling those same two miles costs e-scooter users less than 3 dollars. That’s a savings of 2 to 4 dollars per trip, and that’s before accounting for surge pricing that can greatly increase rideshare costs.

Startups like Bird are estimated to make between 2 to 3 dollars per ride and can make 20-30 dollars per scooter each day in highly populated cities. ((Tom Huddleston Jr., Uber and Alphabet just invested $335 million in Lime – here’s why scooter start-ups are suddenly worth billions, CNBC make it (July 13, 2018, 12:47 PM), https://www.cnbc.com/2018/07/11/lime-bird-spin-why-scooter-start-ups-are-suddenly-worth-billions.html)) Based on the number of rides that Bird reported in April 2018, this equates to an annual revenue of $14 million, but that number is only set to grow as the scooters arrive in more cities. ((Id.)) Lime, a Bird competitor, reported 55,000 rides taken within 3 weeks of its launch in San Diego. ((Id.)) Estimates suggest that if that type of success spread across the United States, then companies like Lime could be raking in more than $760 million per year. Investors have taken notice of consumers’ interest in e-scooter transportation. This past year, Bird was able to double its valuation to $4 billion and Lime’s valuation surpassed $1.1 billion only 18 months after launching. ((Irfan, supra note 4.))

Safety & Liability: Are E-Scooter Startups Flying Too Close to the Sun?

With millions of users and huge valuations, e-scooter companies are soaring; however, the speed with which they descend upon cities, combined with the lack of regulations for e-scooters, has opened the door for safety concerns and liability claims. ((Huddleston, supra note 21.)) Bird and other e-scooter startups should be wary of moving too fast, too soon, lest they suffer the same fate as Icarus, whose wings were destroyed when he flew too close to the sun.

In most states, riders do not need a license to use an e-scooter. Bird’s rental agreement requires that riders be at least 18 years old, but it isn’t clear how a rule like this would be enforced. ((Rental Agreement, Bird Rental Agreement, Waiver of Liability and Release (Aug. 1, 2018), https://www.bird.co/agreement)) In fact, many of Bird’s “rules,” such as requiring solo riders or not placing heavy objects on the scooter’s handlebars, are consistently violated. Many cities have not yet developed a set of “best practices,” so even users that intend to use the scooters lawfully are unsure of proper protocol. ((See Irfan, supra note 4.)) When used in the road, scooters can be hazardous for vehicle drivers because they lack turn signals and drivers can be caught off guard when scooters appear. ((Id.)) In bike lanes, riders unfamiliar with biking etiquette can present a challenge to bicyclists. ((See Id.)) For side walk pedestrians, scooters racing by at 15 miles per hour create the possibility of collision. ((Id.)) Finally, scooters left in non-designated spaces, whether in roads or on sidewalks, create serious risks for both drivers and pedestrians. ((Id.))

Riders are putting themselves at risk by using the scooters. A bump in the road or sidewalk that a bicycle might easily overtake can cause a scooter to falter or cause the rider to fall. Unruly weather can “weaken tires’ grips” and cause them to lose traction, eventually making it difficult for riders to maintain control. ((Irfan, supra note 4.)) As e-scooters roll out in more and more cities, their ability to function in inclement weather is of particular concern. The wear and tear experienced by a scooter in Los Angeles, for example, is likely to be far less than one located in a city such as Ann Arbor. Even if riders are expected to assume a certain level of risk by riding these scooters, it is fair to say that most riders expect their scooters to be in proper working condition, something that may be difficult to ensure in damp climates. Additionally, scooters do not come with attached helmets, making potential crashes even more dangerous. Many cities, such as Ann Arbor, have loose helmet laws. ((See Mich. Comp. Laws § 257.658 (2018).)) In states and cities where helmet laws are stricter, e-scooter companies, such as Bird, are lobbying to relax those laws. ((Irfan, supra note 4.)) Bird does currently send active riders free helmets upon their request; however, given that e-scooter use is popular for its convenience, it’s unlikely that many riders would trudge around town with a helmet in tow.

As with most activities, by signing up to ride, users assume a certain level of responsibility for the risks they take by riding these scooters (though, obviously, the extent of liability will vary state to state). Still, as accidents rise in number, lawsuits will inevitably arise that challenge the extent of user liability. And, further, it is unclear who is responsible to the pedestrians that are potentially put in harm’s way as a result of e-scooter usage. In California, a class action suit has already been filed accusing Bird, Lime, and other e-scooter startups, for gross negligence as well as aiding and abetting assault. ((Peter Holley, Class-action lawsuit accuses e-scooter companies of ‘gross negligence’, Wash Post: Innovations (Oct. 20, 2018), https://www.washingtonpost.com/technology/2018/10/20/class-action-lawsuit-accuses-e-scooter-companies-gross-negligence/?utm_term=.206b56cb7e9f)) Plaintiffs in the suit have suffered “broken bones, deep cuts requiring stitches, and broken teeth” both as pedestrians and as users themselves. ((Mitchell, supra note 2.)) Allegedly, e-scooter companies have acted negligently by “dumping” scooters, without warning, in busy, public areas where they have become a danger and a nuisance. ((Holley, supra note 37.)) Although Bird has basic safety instructions on its website, users are not required to watch any safety videos or take any quizzes before riding. The suit takes this into account, pointing to “inadequate safety instructions” as a display of the “wanton disregard” for public safety. ((Id.)) Although the plaintiffs are seeking damages for their injuries, the suit also asks that e-scooter companies be required to add additional warnings and instructions to their apps. ((Id.)) Currently, the suit is limited to California; however, e-scooter safety is a broad, nationwide issue and we are sure to see similar legal battles in the future.

Something to Crow About: How Cities are Managing the Sudden Influx of E-Scooters

E-scooter companies have been met with criticism for their “act now, ask forgiveness later” approach. ((Dara Kerr, Two electric scooter companies, Skip and Scoot, take the win for SF permits, Cnet: Culture (Aug. 30, 2018, 5:38 PM), https://www.cnet.com/news/two-electric-scooter-companies-skip-and-scoot-take-the-win-for-sf-permits/)) Bird and Lime, for example, deploy their fleets in cities without providing notice to city officials. Regulators are then forced to play catch up in enacting safety schemes. ((See Id.)) Several cities have banned e-scooters altogether until public officials are able to compile a regulatory framework for their operations. ((Huddleston, supra note 21.)) Other cities have run into legal requirements that prevent e-scooter startups from operating. Cambridge, for example, initially banned the devices, but now seeks to bring e-scooters back. ((Adam Vaccaro, Those electric scooters like Bird and Lime? They’re illegal in Mass., Bos. Globe: Bus. & Tech. (Sept. 18, 2018), https://www.bostonglobe.com/business/2018/09/18/those-electric-scooters-like-bird-and-lime-they-illegal-mass/Mw0V3jpF6DNwUeYKGTNhVM/story.html.)) Unfortunately for Cambridge, the scooters appear to be against state laws requiring that powered scooters have “brake lights and turn signals.” ((Id.)) If e-scooter startups wish to operate in cities like Cambridge, they will have to develop devices that abide by local city laws.

In Austin, city officials have imposed stringent parking rules for e-scooters requiring that they be parked in designated areas. ((Dickey, supra note 17.)) By doing so, concerns of scooters littering the streets and becoming a nuisance are lessened. ((Id.)) San Francisco has taken what may be the most creative and systemic approach towards e-scooter companies. In March 2018, Bird and Lime e-scooters descended upon San Francisco, and by June they had vanished. ((Irfan, supra note 4.)) The city had banned e-scooters until it could develop a comprehensive plan for their operations and in April of 2018 passed a law limiting the total number of e-scooters within the city to 1250 for the first six months. ((Kerr, supra note 42.)) Thereafter, that number may be increased to a cap of 2500 contingent on companies operating responsibly.  Additionally, the number of e-scooter companies allowed to operate within the city would be limited to five. ((Id.). After its initial ban, San Francisco began accepting applications from various e-scooter startups. After three months, officials accepted two applications and gave both Skip and Scoot permits for one-year pilot programs. ((Id.)) To remain within the imposed limit of 1250, each of the two permitted companies are allowed to deploy 625 scooters. ((Irfan, supra note 4.))

So why was San Francisco quick to accept companies like Scoot and Skip while at the same time dismissing Bird and Lime?  Unlike Bird, Scoot and Skip announce their arrival in a city beforehand and work with city officials to create smoother transitions. ((Kerr, supra note 42.)) Both Scoot and Skip also have additional safety mechanisms that most other e-scooter companies do not. For example, Skip scooters have sensors to detect if they have been knocked over. ((Carolyn Said, Electric scooters returning to SF streets as part of pilot program, S.F. Chron. (Oct. 15, 2018), https://www.sfchronicle.com/business/article/Electric-scooters-returning-to-SF-streets-as-part-13305689.php)) This feature allows Skip team members to pick up fallen scooters, preventing them from become a hazard to drivers and pedestrians.  Scoot and Skip also require that new users “watch animations and videos about local laws and desired behaviors,” maintain street outreach teams that instruct users as to how to use the devices, and provide helmets upon request. ((Id.)) Overall, small changes like these can lessen the risk of harm and potential liability while simultaneously earning the respect of city officials. Startups such as Bird will only succeed if they are able to become a nationwide fixture. To achieve this, it may be wise to work with legislators and officials rather than surprising cities with surprise arrivals and leaving them to deal with the consequences.

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Nicole Minevich