Authored Articles & Publications Feb 22, 2018

Dockless Disruption: Maximizing Opportunities Through Smart Regulations

BB&K's Gregory Rodriguez and Steven DeBaun Discuss Bikeshare Issues in PublicCEO

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By Greg Rodriguez and Steven DeBaun

As communities seek to decrease car use and promote alternative forms of transportation — like biking — cities have launched pilot projects around “dockless” bikeshare programs. Dockless bikeshare, offered by companies like LimeBike, Ofo and Jump, is an example of an exciting innovation with great potential. Unfortunately, as with many emerging innovations, the lack of clear regulations is leading to opposition from citizens and local governments, and costly lawsuits, which is detracting from the sustainable and increased mobility opportunities that dockless bikeshare offers.

Most cities where dockless bikeshare testing is ongoing rightly recognize that innovation is not exempt from public contracting requirements and have made testing agreements. For communities contemplating an emerging technology pilot project, it is important to consider these contracts involve new technologies that necessitate innovative contracting clauses that consider evolving legal issues like data sharing, intellectual property infringement (see recently settled Waymo v. Uber lawsuit), privacy and new and unknown liabilities that require risk management and insurance considerations. Further, careful consideration needs to go into whether negotiating exclusive agreements with companies when a technology is just coming onto the market is in the community’s best interests.

Disruption from dockless bikeshare has spilled over to something that many communities hold dear: sidewalks. In many communities, particularly in residential areas, citizens have pushed back claiming that dockless bikes being left in the middle of sidewalks and on street corners are a nuisance and a public safety issue. While such claims can normally be dealt with through an established code enforcement process, most jurisdictions have not updated their codes to address such technologies and, thus, do not have a clear mechanism for addressing citizen concerns.

For example, in reviewing a user agreement from a dockless bikeshare company, it states that, upon conclusion of a ride, a bike “must be parked at a lawful parking spot.” However, the term “lawful parking spot” is not defined in the user agreement and likely not defined in the applicable city code. An inability to address such concerns leads to negative press instead of a positive focus around the opportunities that such new innovations bring, and may turn elected leaders against these projects in the future.

Continuing to encourage the testing of new innovations in our communities should be encouraged, but establishing basic regulatory foundations around pilot projects will help reduce the unintended speed bumps and citizen pushback, as well as ensure safety, mitigate risks and reduce potential legal costs. The risk of litigation is not limited to just existing contracts, but also includes new companies claiming that, since there are no regulations prohibiting the operation of new technologies in a community, then it has the right to launch without any approvals from local officials.This is the lawsuit playing out in Santa Monica, Calif. with a dockless electric scooter company.

Regulations that address innovative pilot projects can be simple and uncomplicated so they can adapt with technology. Hopefully, lessons learned come from data that is shared and collaboratively analyzed by the company and its public partner through a pilot project. When adopting regulations, a community will need to be proactively aware of any potential state legislation seeking to reduce local control and be ready to oppose such legislation.

Being proactive to implement basic policies focused on the safe and effective integration of emerging technologies into communities allows elected officials, staff and citizens to collaboratively chart and embrace a vision for technology in a community. The alternative means risking that technology operates uncontrolled and causes unproductive disruption that lead to unnecessary risks.

This article was originally published Feb. 22, 2018 in PublicCEO. Republished with permission.

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