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

Posted by on July 21st, 2016 at 11:02 am

Biketown users on the Hawthorne Bridge yesterday.(Photos: J. Maus/BikePortland)

Biketown users on the Hawthorne Bridge yesterday.
(Photos: J. Maus/BikePortland)

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.

“Unfortunately this is very standard pro-corporate anti-consumer language.”
— Mark Ginsberg, lawyer

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-2

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.

BTA's Alice Awards and Auction

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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48 Comments
  • gretchin July 21, 2016 at 11:20 am

    THANK YOU THANK YOU THANK YOU for highlighting this! Mandatory and exclusive arbitration in contracts is one of my pet peeves.

    Recommended Thumb up 28

    • Chris I July 21, 2016 at 2:26 pm

      If only we had a functioning Congress that could do something to outlaw these agreements…

      Recommended Thumb up 7

  • JJJ July 21, 2016 at 11:21 am

    Slimy, slimy move.

    Recommended Thumb up 11

  • Ted Timmons (Contributor) July 21, 2016 at 11:26 am

    glad the opt-out instructions are given 🙂

    I understand having an arbitration clause. doesn’t mean I like it.

    Recommended Thumb up 4

  • PdxMark July 21, 2016 at 11:32 am

    For daily users, is one arbitration opt-out enough, or is a new opt-out needed for each use?

    Recommended Thumb up 5

    • Michael Andersen (News Editor)
      Michael Andersen (News Editor) July 21, 2016 at 12:08 pm

      I’ve asked Motivate and will update the story with whatever we hear.

      Recommended Thumb up 2

      • Michael Andersen (News Editor)
        Michael Andersen (News Editor) July 21, 2016 at 2:36 pm

        Motivate spokeswoman Dani Simons, via email today: “If an individual opts out once we will honor that individual’s opt-out for future pass purchases.”

        Recommended Thumb up 7

        • Michael Andersen (News Editor)
          Michael Andersen (News Editor) July 22, 2016 at 12:12 pm

          Another update: “If someone lapses and then rejoins they will have an additional 30 days to decide if they want to opt-out.”

          Recommended Thumb up 1

  • Bjorn July 21, 2016 at 11:39 am

    I attempted to opt out yesterday when Mark alerted me to this. My emails have been bouncing back as undeliverably from the legal@motivateco.com email address. I finally gave up and emailed customer service asking them what to do to opt out, so far no response. I am curious if anyone else is having a similar issue.

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    • Ted Timmons (Contributor) July 21, 2016 at 11:43 am

      weird- I’m not getting a bounce from that address, at least through gmail (google apps for domains). Maybe it’ll fail eventually for me. But yeah, IANAL, but for me, I assume getting it on record is fine- “I tried to opt out per instructions and it failed, so I sent the opt out to cust svc, here’s the email proof.”

      Recommended Thumb up 1

  • Adam H.
    Adam H. July 21, 2016 at 11:42 am

    Yeah well, I guess that’s what happens when we allow investment banks to purchase and operate public transport.

    Recommended Thumb up 7

    • DQ July 21, 2016 at 12:42 pm

      1. An investment bank and an investment group are not the same thing. Motivate is not an investment bank.

      2. Motivate didn’t ‘buy’ public transport, they just bought the operations company.

      3. The client (the city in this case) always reviews the user agreement. I’ve never been involved in a system where the city didn’t get a say in this type of thing.

      4. Motivate operates more systems without this requirement than with it. So it’s not simply a Motivate thing.

      Recommended Thumb up 12

      • Ted Timmons (Contributor) July 21, 2016 at 12:49 pm

        and it’s a “damned if you do, damned if you don’t” situation. either it’s the branding/”disneyfication” of public property or it’s wasting taxpayer dollars to start the program, and likewise with operational costs (staffing).

        Recommended Thumb up 8

        • Kittens July 22, 2016 at 9:22 am

          Good point
          but I think certain parties which start with D should figure out by now that this is just playing into the “government so small that you can drown it in a bathtub” theory in that much of the potential upside will go to Nike rather than the city. The branding is so ubiquitous and well executed but ultimately leads you to overestimate the role Nike plays.

          Nike on the other hand gets it both ways. Due to their insane margin, they get to write off any losses while banking the goodwill. Sort of like Google and its various pet projects. None of the scrutiny or expectations of the public sector.

          This is the slow death-spiral set in motion when heavily branded public-private partnerships are formed.

          Recommended Thumb up 3

          • Adam H.
            Adam H. July 22, 2016 at 9:26 am

            Yeah, but that’s completely ignoring the benefits bike share provides to the people. The role of government is to provide beneficial services for its citizens and in this case I consider Biketown a win for our city government.

            Recommended Thumb up 1

  • reader July 21, 2016 at 11:52 am

    Why would anyone ever want to sue Biketown??

    Recommended Thumb up 0

    • B. Carfree July 21, 2016 at 12:01 pm

      Taking your question at face value, how about when Biketown fails to maintain the bike and the internal gear hub comes out of gear at a particularly bad time which causes a crash? I would hazard to guess that the victim of such a crash might be inclined to sue.

      Recommended Thumb up 11

      • Andrea July 21, 2016 at 12:21 pm

        Exactly what I was thinking, something akin to GM’s faulty ignition switch or the Voltswagon emissions fraud comes to mind. Hopefully nothing like that would happen, but if it did, one might want to retain their rights to sue in order to cover hospital bills and lost wages.

        Recommended Thumb up 2

    • jeff July 21, 2016 at 12:10 pm

      a bunch of novice tourists using “cute, orange’ bikes in ‘bikeytown’ USA? the recipe is ripe for accidents and lawsuits…

      Recommended Thumb up 4

    • Psyfalcon July 21, 2016 at 12:12 pm

      Or you get overcharged in such a way that your credit card wont cover.

      There is your $10 each class action.

      Recommended Thumb up 6

    • Adam H.
      Adam H. July 21, 2016 at 12:13 pm

      Retinal damage from the bright orange color? 😉

      Recommended Thumb up 1

    • Tom Hardy July 21, 2016 at 12:50 pm

      It is covered in the case a truck or car runs into the bike you returned and locked to the bike rack. You as the last user are the one liable for the $2300+ to replace it. It will be charged to your credit card account. If you do not opt out that is.

      Recommended Thumb up 6

      • Stephen Keller July 21, 2016 at 1:00 pm

        That suggests a time stamped photo of ever bike town parking event would be wise.

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        • Beth H July 22, 2016 at 12:08 pm

          “Welcome to the new Pokemon Go: Litigation Avoidance version, a BIKETOWN (TM) exclusive! Document everything you do on and off your BIKETOWN (TM) bike with time-stamped photos and option Twitter-length captions, then post them to your own secure web gallery (available for purchase with first rental).
          Provides you with the ability to completely curate your very own bike rental experience from start to finish. Every curated BIKETOWN (TM) trip earns you points which can be used to purchase cool stuff, like BIKETOWN (TM)-orange helmets, coffee thermoses, safety vests and much more!
          Must waive right to enter into class action lawsuits; ages 18+ only.”

          Tongue firmly planted in cheek, folks, so please don’t sue me.

          Recommended Thumb up 0

  • wsbob July 21, 2016 at 12:08 pm

    Tricky, or seems kind of that way. Though it’s listed in the outline close to the top of the agreement, the actual text of the opt out clause is located in section 15, way down the lengthy agreement. What’s the likelihood that most people using bike share, are going to have done so much as browse over the text of the agreement. Having had the experience of being commonly presented with similarly lengthy legalistic language associated with lots of computer software, likely will mean most people will basically ignore the agreement, get on the bright orange bikes and go-o-o!

    But anyway…what could happen associated with using a biketown bike, that might cause a bike share user to have a need to seek private legal counsel to be compensated for loss due to something gone wrong with the bikeshare bike they were riding? Not an easy or simple question to answer, I suppose.

    While I’m definitely not enthusiastic about people enabled to pursue frivolous lawsuits…strategies used to preclude the opportunity for just compensation for wrongs, is something that’s not fair, or even very honest.

    I got to admit, I don’t know a lot about the reasons for these kinds of agreement clauses. Below the surface appearance to consumers, the agreement clause may, to groups that use them, be seen by them, as a component that’s essential to their survival, rather than as some may think…primarily a profit gaining strategy, or an overhead reduction strategy.

    The lawsuit-arbitration controversy, is a big, big, long standing issue. Take a look at the NYtimes article, Pt 1 (links to Pt’s II and III, at the bottom of that story) , linked in this story, if you’ve any question about that.

    As a matter of course, opting out of the arbitration obligation, seems the wise thing for bike share users to do. Maybe they had a legitimate reason for including such a clause, but it’s too bad that biketown’s legal advisors and operators, felt they had to put this clause, they way they did, in the biketown bike share user agreement. It seems sneaky…dishonest.

    I’d welcome the opportunity to read what the biketown team may be willing to offer, related to their feelings about the arbitration clause in the biketown agreement.

    Recommended Thumb up 4

  • Robert L. July 21, 2016 at 12:09 pm

    What the future may hold is anyone’s guess. I’m going to bookmark this article just for future reference.
    I have no plans to join or use the bike share in Portland at this time. I have no issue with the system, it’s just that their service area is more than 50 blocks from my current home. As always “outer” Portland gets the shaft.

    Recommended Thumb up 5

    • Gary B July 21, 2016 at 12:58 pm

      Or in this case, didn’t get the shaft (…drivetrain bikes). Bada-bing!

      Really though, I hope it proves popular and grows to include more and more of us. I’m in St Johns and without Car2go (a handy thing I use to like to have available) and now Biketown. It is definitely a drag.

      Recommended Thumb up 5

    • 9watts July 21, 2016 at 2:25 pm

      “their service area is more than 50 blocks from my current home. As always ‘outer’ Portland gets the shaft.”

      I don’t think this is necessarily a fair criticism. I think people are laboring under some misconceptions about public transportation.

      Public transportation is not a right. It only makes sense above certain densities; there are logistical and financial hurdles to consider, etc. With things like sidewalks and bike infrastructure I think outer Portland has historically gotten the shaft, but I think there is a qualitative difference between infrastructure and public transport. No one in their right mind would feel entitled to frequent bus service out in the country. There is simply no way to justify that sort of expense given the low utilization potential.

      Recommended Thumb up 5

      • Spiffy July 21, 2016 at 4:14 pm

        and yet bike share and care share come nowhere close to serving what transit does…

        the entire city limit is fairly dense, especially east out to Gresham…

        Recommended Thumb up 1

  • Bobby Dezfulli July 21, 2016 at 12:34 pm

    A lawyer against arbitration?? Why I’d never imagine the day!

    Recommended Thumb up 1

    • mark ginsberg July 21, 2016 at 2:43 pm

      No Bobby, against forced private non-court handled arbitration, run by a private company with a financial bias against the consumer.

      Regards,
      Mark J. Ginsberg, Esq.

      Recommended Thumb up 25

  • Audrey July 21, 2016 at 12:56 pm

    Done. Thanks for the head’s up Michael.

    Recommended Thumb up 4

  • Jim Lee July 21, 2016 at 1:25 pm

    Blame Novick–and Harvard Law.

    Recommended Thumb up 1

  • CaptainKarma July 21, 2016 at 2:28 pm

    Shocked! Shocked, i tell you, to hear other than fantastic, glowing things about orange bikes on BP.

    Recommended Thumb up 4

  • Spiffy July 21, 2016 at 2:33 pm

    Q U I C K _ P O L L

    did you read the entirety of the user agreement before agreeing to it?

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    • Spiffy July 21, 2016 at 2:48 pm

      statistics say that the average reader would take 30 minutes to read the agreement… and that they would comprehend 60% of the material… probably less for legal material with terms you’re unfamiliar with…

      so how many tourists standing at a bike rental station took 30 minutes to read the agreement (and where? on the bike’s LCD?) before renting and completely understood it? I’m betting on zero…

      these types of lengthy legal agreements are coming under a lot of scrutiny lately and aren’t holding up well in court… this seems like just another example…

      Recommended Thumb up 4

    • Adam H.
      Adam H. July 21, 2016 at 2:49 pm

      I almost never read the agreements. They are typically written in a way that only a lawyer can understand and half the time aren’t even enforceable anyway.

      Recommended Thumb up 1

  • Spiffy July 21, 2016 at 2:46 pm

    I’m guessing this isn’t the only issue he found with the legal text… just a quick skip seems to show many portions that are just impossible to fulfill…

    does every station have a pump with gauge and a wheel-truing stand? if not then how are you supposed to ensure that the tire pressure is correct and the wheels are true per the agreement?

    and how are you supposed to ensure the brakes and lights work properly BEFORE you use them? you have to get on the bike to know the brakes will stop you, and I thought the lights turned on automatically when you started going…

    Recommended Thumb up 4

    • Adam H.
      Adam H. July 21, 2016 at 3:21 pm

      Just keep in mind that the mere act of riding a bike makes you at fault for everything.

      Recommended Thumb up 3

  • Mike 2 July 21, 2016 at 3:46 pm

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

    Who is the plaintiff? As I understand the story, this is something Mark found without representing anyone yet – are you saying there is already an action against Biketown and/or Motivate here in Portland?

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    • Robert Burchett July 22, 2016 at 7:52 am

      Clearly Mark Ginsberg, Esq., has a point of view. He could have said ‘If you do not opt out, and if you ever have a serious disagreement with Biketown, you will find that it is being adjudicated by a person who gets their paycheck from your opponent.’ Seem fair?

      Now I have a new reason to rent an orange bike, so I can poke a stick in the eye of this compelled arbitration business.

      Thanks, Mark!

      Recommended Thumb up 1

  • Anna G July 22, 2016 at 9:55 am

    regarding fine print, I read an article in yesterdays’ Portland Tribune that suggested that there was a limit on the amount of minutes/hours depending on whether one choose a daily/yearly plan. Something like 90min/day and 180 min/day (yearly). Is this true ? I just assumed it was unlimited except for those paying by the hour.

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    • Kath Youell July 22, 2016 at 12:07 pm

      It’s true and it’s why I won’t join. Makes them useless for me.

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      • Anna G July 22, 2016 at 12:32 pm

        thanks, yes that’s a deal breaker for me as well.

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  • reader July 22, 2016 at 9:59 am

    Isn’t that a photo of Scott Bricker?

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    • Robert Burchett July 22, 2016 at 6:23 pm

      Nope

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