The City of Chicago recently wound down a 4-month e-scooter pilot program, with mixed results. Advocates extolled the benefits of “first and last mile” solutions that reduce car trips, while detractors expressed concern over safety, street clutter, and access.1 Across the country, some municipalities are opting to ban scooters completely and others have no regulations at all. New York City lifted an e-scooter ban in June but the entire borough of Manhattan remains off limits to shared scooter rentals.2 Chicago’s pilot seemed to strike a middle path between the extremes of scooter regulation: the pilot program banned the devices from downtown and denser residential neighborhoods and allowed and encouraged their use in lower-income neighborhoods not well-served by transit.
January 15, 2020 Feature
Shared E-Scooters and Liability: When Are Cities on the Hook?
By Michael D. Noonan
Such is the state of “Micromobility” in 2019. The industry has disrupted the way many Americans get around and has raised several novel legal issues, with states and municipalities struggling to find a “one size fits all” solution. This article will focus on liability faced by dockless shared scooter operators and municipalities, both for property damage issues and for personal injury connected with scooter use, and will attempt to create a snapshot of the patchwork quilt of scooter regulations as they pertain to liability. This article draws on currently available information and data that, given the young age of the industry, is fairly sparse.3
According to a 2019 study, municipalities use four common mechanisms to regulate scooters: ordinances, pilot programs, agreements, and permits.4 Eigthy-six percent of the municipalities sampled used one or more of these four options to regulate scooters.5 The remaining 14% used atypical regulations, which were not explored, or did not regulate scooters at all.6 (The study uses a sample set of 50 cities, chosen at random from 101 cities with scooter programs as were known at the time the data was collected).7
Of the 50 cities surveyed, 24 used ordinances, 16 used pilot programs, 9 used agreements, 5 used permits, and 7 cities used other approaches or did not regulate scooters.8 In the surveyed jurisdictions, a majority required operators to indemnify cities from claims arising from scooter use.9 For example, the cities of Santa Monica, San Francisco, and San Diego, California, all have enacted requirements for scooter operators to indemnify the respective cities as a condition of operation, while other California cities have similar policies in different states of passage.10 These cities’ policies typically limits operator liability when the injury is caused solely by the willful misconduct of the city.11
Scooter operators generally have complied with these policies but have resisted indemnification for willful misconduct of the city in question. 12 An Oakland, California indemnification provision required that the operators indemnify the municipality for injuries “arising out of […] the design, construction, maintenance, repair, replacement, oversight, management, or supervision of any physical, environmental, or dangerous conditions” of public streets.’13 This expanded indemnification policy was adopted into the final permitting scheme in May 2019 over industry objections.14
On the state level, scooter operators have lobbied state legislatures for more flexible regulation, and many states have obliged them. Kentucky, Virginia, New Jersey, Hawaii, Massachusetts, and at least 15 other states have enacted such legislation, and provisions for (limited) indemnification of local governments is common.15 In Utah, a pending bill would require scooter operators to indemnify local governments for claims arising out of scooter use, without strenuous objections;16 instead, the industry has fought regulations that restrict where scooters may be parked.17 The market for shared scooters has attracted a large industry that has come to accept and municipal indemnification as one of the costs of admission to the market.
Indemnification provisions in operating agreements may not necessarily protect municipalities from liablity for injuries and damage arising out of shared scooter use. The “dangerous conditions on public property” theory will strike a chord with anyone who has ever ridden an electric scooter (or, presumably, that person’s attorney) given the typical scooter small wheel diameters (5 to 8 inches) on a pothole-ridden city street. Under that theory a city may be liable for injuries that result from dangerously maintained public rights of way.18 This theory derives from state law, thus its viability will vary by state, but in general the theory could make for a plausible claim given proof of the elements of the claim. For example, In California:
Pursuant to Government Code Section 835, a city may be liable for injury caused by a dangerous condition of its property if the plaintiff establishes: (1) that the property was in a dangerous condition at the time of the injury, (2) that the injury was proximately caused by the dangerous condition, and (3) that the dangerous condition created a reasonably foreseeable risk of the kind of injury which was incurred. A plaintiff must also establish either: (4) that a city employee negligently or wrongfully created the dangerous condition; or (5) that the city had actual or constructive notice of the dangerous condition before the incident.19
The landscape of personal injury issues related to scooters often is just as muddy as the field of municipal liability. As of early 2019, the number of personal injury suits filed was relatively low, but rising.20 The major deterrents to these lawsuits often are found in the terms of the user agreements21 that typically contain arbitration clauses that plaintiffs have had limited success undermining in court.22 In October 2019, a negligence suit in Texas involving Lime, an e-scooter operator, and the family of a man who died after falling from an electric scooter was sent to arbitration, per the terms of the user agreement.23 Plaintiffs can sometimes include parties that never consented to the user agreement, such as pedestrians stuck by scooter riders, or property owners who have suffered property damage, as a work around to the limitations on suits in the user agreements.24
As fall winds, snow, and small birds blow into Chicago, and the pilot program wraps up, the City is conducting a data survey to evaluate the future of its shared scooter program.25 A “non-scientific” survey of approximately 1,500 Chicagoans by the Active Transportation Alliance (ATA), done prior to the end of the City’s official study, showed that 63% support a City-developed permanent shared scooter program. Respondents who reported having used a scooter during the pilot program nearly were twice as likely to support a permanent program.26 The ATA advocates for alternatives to driving and has recommended that a permanent program include provisions to keep scooters out of downtown, has advocated for use of a docking system and has advised that scooter companies pay into a “safe streets fund” for infrastructure improvements in the high frequency crash areas.27 As the Micromobility industry continues to grow and mature, along with the laws that regulate it, only time will tell if shared scooter programs are here to stay and what role they will play in our everyday lives, love them or hate them.
Endnotes
1. Id.
2. Azi Paybarah, Why Electric Scooters and Bikes Are Finally Coming to New York, N.Y.T., 2019, https://www.nytimes.com/2019/06/21/nyregion/newyorktoday/nyc-news-scooters-bikes.html (last visited Oct 31, 2019).
3. Herrman, M. (2019). A comprehensive guide to electric scooter regulation practices. Master of Regional and Community Planning. Kansas State University at 6.
4. Id. at 12.
5. Id.
6. Id.
7. Id. at 9.
8. Id. at 13.
9. Id. at 18.
10. Zachary Heinselman, Emily Milder & Laurence Weiner, Scooter Wars: Challenges and Opportunities in Local Regulation of Shared Mobility Devices, in League of California Cities Spring Conference 2-8 (2019), https://www.cacities.org/Resources-Documents/Member-Engagement/Professional-Departments/City-Attorneys/Library/2019/Spring-2019/5-2019-Spring;-Heinselman-Scooter-Wars-Challenges.aspx (last visited Oct 15, 2019).
11. Id. at 22.
12. Id.
13. Id.
14. Dockless Scooter Share Program Terms and Conditions + Permit Application (2019).
15. Jim Sams, States Treat Electric Scooters as Bikes Even as Injuries Appear to Rise, Ins. J. (Apr. 1, 2019), available at https://www.insurancejournal.com/magazines/mag-features/2019/04/01/521813.htm.
16. Id.
17. Id.
18. Zachary Heinselman, Emily Milder & Laurence Weiner, Scooter Wars: Challenges and Opportunities in Local Regulation of Shared Mobility Devices, in League of California Cities Spring Conference 19 (2019), https://www.cacities.org/Resources-Documents/Member-Engagement/Professional-Departments/City-Attorneys/Library/2019/Spring-2019/5-2019-Spring;-Heinselman-Scooter-Wars-Challenges.aspx.
19. Id. at 19.
20. Sarah Holder, Anatomy of an Electric Scooter Crash, CityLab (Jan. 10, 2019), https://www.citylab.com/transportation/2019/01/scooter-crash-accidents-safety-liability-bird-lime/577687.
21. Id.
22. Id.
23. Linda Chiem, Legal News & Analysis on Litigation, Policy, Deals, Law360.com (2019), concerning Phillips et al. v. Neutron Holdings Inc. et al., U.S. District Court for the Northern District of Texas.
24. Anatomy of an Electric Scooter Crash, CityLab (Jan. 10, 2019).
25. A. D. Quig, What’s the Future of Scooters in Chicago? Crain’s Chicago Bus. (Oct. 15, 2019), available at https://www.chicagobusiness.com/government/whats-future-scooters-chicago.
26. Alex Nitkin, As Pilot Ends, Make e-scooters Permanent, but Keep Them Out of Downtown, The Daily Line (Oct 15, 2019), http://www.thedailyline.net/chicago/10/15/2019/as-pilot-ends-make-e-scooters-permanent-but-keep-them-out-of-downtown-report.
27. Id.
Reprinted with permission from State & Local Law News, Winter 2020 (43:2) ©2020 by the American Bar Association Section of State and Local Government Law. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.