Biketown contract forces users to waive their legal rights – unless they act quickly

Buried in the “miscellaneous” section of the user agreement for Portland’s new bike-sharing system is a notice that Biketown users are waiving their rights to a jury trial.

Unless, that is, they sent a one-line email to the company that operates Biketown within 30 days of first using the system. If they don’t, a prominent Portland bike lawyer says, their chances of winning any future legal claim against Biketown are slim.

The requirement was spotted this week, just after the system launched, by (among other people) Mark Ginsberg, a Portland attorney who specializes in “bicycle legal needs.” He shared his discovery in a post to friends on his Facebook page:

hey Portland friends who got BikeTown memberships, you read the contract right?
In Section 15, they force you into arbitration, unless you take action within the first 30 days (clarification- within 30 days of first use) to opt out of arbitration.
As your lawyer friend, I’m here to tell you that you should opt out.
don’t say I didn’t warn you.

Though Ginsberg referred to people who buy memberships, the terms apply to all users of Biketown, including people who buy rides $2.50 at a time.

What’s “arbitration” in this context? As reported in depth last year by the New York Times, it’s an increasingly common system that was designed to reduce the chance that companies will lose lawsuits brought by their customers. By including requirements like these in their terms of service or user agreements, the Times reported, consumer complaints are heard by a corporate lawyer rather than a government judge.

“The arbitrators are paid for by the bad guys,” summarized Ginsberg, the plaintiff’s attorney.

Like many similar contracts, Biketown’s binding arbitration clause also prevents bike-share users by default from joining class action lawsuits, which are a primary tool consumer attorneys use to penalize companies for wrongdoing.

“If you have a claim against them for $5, you can’t bring that claim,” Ginsberg said, explaining the concept behind class actions. “But if 1,000 people have a claim against them for $5, then they can bring that together.”

Because class actions can be costly to businesses and are more lucrative for plaintiff’s attorneys than for most plaintiffs, they are controversial. But they also undeniably create an incentive for companies to beware of defrauding or mistreating customers.

How Biketown users can protect their jury trial rights

Fortunately for Biketown users who happen to know the secret, the Biketown contract makes it easy a member to retain those legal rights.

Within 30 days of first using Biketown, the contract says, they have to send an email to legal@motivateco.com with the subject line “ARBITRATION AND CLASS ACTION WAIVER OPT-OUT.”

That’s it.

Here are the relevant instructions from the rental agreement for opting out of the restriction:

You have the right to opt out and not be bound by the arbitration and class action waiver provisions set forth above by sending written notice of Your decision to opt out to legal@motivateco.com with the subject line, “ARBITRATION AND CLASS ACTION WAIVER OPT-OUT.” The notice must be sent within thirty (30) days of Your first use of the Services, otherwise you shall be bound to arbitrate disputes in accordance with the terms of those paragraphs.

In a 2014 post, the website Consumerist (which is published by the magazine Consumer Reports) offered a post titled “Why You Should Opt Out Of Forced Arbitration, In 3 Sentences.” Among the points it made was that even after opting out, someone “can still agree to arbitrate, if you would prefer that option.”

In an email to BikePortland Thursday, Motivate spokeswoman Dani Simons said that any given bike-share user only has to opt out once for all future memberships: “If an individual opts out once we will honor that individual’s opt-out for future pass purchases.” In a second email Friday, she said that “if someone lapses and then rejoins they will have an additional 30 days to decide if they want to opt-out.”

Binding arbitration is uncommon among bike-share user agreements

Capital Bikeshare in Washington DC is one of many that doesn’t require users to waive their jury trial rights if something goes wrong.

A review of several other user agreements at U.S. bike sharing systems shows that some include a binding arbitration provision and others don’t.

One that does is Pronto in Seattle, which like Biketown is operated by Motivate, the New York City-based firm that was launched in Portland before its owners sold it amid financial trouble in 2014. Another that does is Grid Bikes in Phoenix, operated by Cyclehop.

Unlike Biketown, Pronto and Grid Bikes don’t seem to offer the “opt out” that lets users retain their jury rights.

New York City’s Citi Bike, Motivate’s flagship system, includes no arbitration clause. Neither do Motivate’s other largest U.S. systems, Capital Bikeshare in Washington DC, Divvy in Chicago, Hubway in Boston or Bay Area Bike Share in San Francisco. Neither does Metro Bike Share in Los Angeles, which launched this month, or Indego, the year-old system in Philadelphia. Those two are operated by Bicycle Transit Systems, a competing firm that was founded by ex-Alta Bike Share employees.

Denver B-Cycle, which is operated by a local nonprofit, also has no binding aribtration clause.

Lawyer Mark Ginsberg at the Bicycle Transportation Alliance Alice Awards in 2007.

Ginsberg looked over the Seattle, Los Angeles and New York City contracts and said that “all these contracts are not very consumer friendly.” He singled out the binding arbitration in Portland, Seattle and Phoenix as “not fair,” but also said it’s not unusual for corporate user agreements.

“Unfortunately this is very standard pro-corporate anti-consumer language,” Ginsberg said. “I don’t think it’s intentional on the part of the City of Portland, but I think they could have done a much better job of having an evenhanded contract, not one that’s so lopsided.”

Ginsberg also called attention to what he called the “loser pays” attorney fee provisions, which he said created a disincentive for individuals to bring lawsuits, and to the indemnification clause, which force the user to assume full legal responsibility for anything they do with the bike sharing company’s equipment.

City transportation spokesman John Brady said in an email Thursday that the city wouldn’t comment on whether it ever discussed these issues with Motivate.

Throughout the process of launching BIKETOWN, we have been careful not to discuss the ins and outs of the contract negotiations. We feel this is important in order to preserve the integrity of both past and future negotiations.

I asked Ginsberg if, knowing what he does now, he would use Biketown.

“I support bike share programs,” Ginsberg said. “I don’t know. I currently am able to get around just fine without it.”

Ginsberg added one other thing: Biketown’s 30-day opt-out clause for binding arbitration is the same one used by Pokémon Go.

— Michael Andersen, (503) 333-7824 – michael@bikeportland.org

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