By David Pimentel†, Michael B. Lowry†, Timothy W. Koglin†, and  Ronald W. Pimentel†


Cite as: David Pimentel, et al., Innovation in a Vacuum: The Uncertain Legal Landscape for Shared Micro-mobility, 2020 J. L. & MOB. 17.



Abstract

The last few years have seen an explosion in the number and size shared micro-mobility systems (“SMMS”) across the United States. Some of these systems have seen extraordinary success and the potential benefit of these systems to communities is considerable. However, SMMS have repeatedly ran into legal barriers that either prevent their implementation entirely, confuse and dissuade potential users, or otherwise limit SMMS’s potential positive impact.

This paper reflects a detailed study of state laws relating to SMMS and the platforms commonly used in these systems. The study uncovered many inconsistencies with micro-mobility laws across the country. Currently, many states lack clear definitions for these emerging forms of transportation, which do not otherwise fit neatly in the categories contemplated by existing law. Several states lack clear, state-level policies, which has led to discrepancies between state and local regulations. Further, there are several areas of micro-mobility law that are sharply inconsistent between states. All of these differences leave users confused as to what the law is and may discourage them from riding.

A number of states are attempting to remedy inconsistencies and legislative silence by passing and proposing laws that regulate the use of electric bikes (“e-bikes”) and electric scooters (“e-scooters”), but even these efforts are unlikely to bring the consistency that is needed. Federal authorities should act to create uniform laws and work with states to adopt them, otherwise, the lack of a legal infrastructure may threaten to stifle the innovation and undermine SMMS’s promised returns.

Introduction 1 1. Funding for this research was provided by a grant from the Pacific Northwest Transportation Consortium (PacTrans), USDOT Transportation Center for Federal Region 10. Additional funding for research assistance was provided by the University of Idaho College Of Law. Thanks also to Ken McLeod of the League of American Bicyclists, Andrew Glass Hastings of Remix, Steve Hoyt-McBeth and Briana Orr of the City of Portland, Chris A. Thomas of the law firm of Thomas, Coon, Newton and Frost, and Asha Weinstein Agrawal of San Jose State University, all of whom were generous with their time, responding to questions and requests and advising the authors on these topics. Credit for design and creation of the searchable state law database, and all the coding it required, belongs exclusively to Timothy Koglin. Thanks to Spencer Felton, Erin Hanson, Brandon Helgeson, Jacqueline Maurer, and Jamie Schwantes for outstanding research of the laws of all 50 states and of the District of Columbia, for populating the database, and for assistance in compiling the report and the early drafts of this paper. ×

The first bike-share programs in the United States appeared in 2010 and since then micro-mobility sharing of electric bikes (“e-bikes”) and electric scooters (“e-scooters”) has greatly expanded. 2 2. Alex Baca, What Cities Need to Understand About Bikeshare Now, Bloomberg Citylab (April 24, 2018, 10:17 AM), https://www.bloomberg.com/news/articles/2018-04-24/a-mostly-complete-taxonomy-of-bikeshare-so-far. × The legal environment, however, has been slow to embrace these innovations, or even to address them. The success or failure of shared micro-mobility systems (“SMMS”) may turn on the legal environment in which they attempt to operate. This study surveyed the laws governing bicycles, e-bikes (bicycles equipped with electric motors to assist in propulsion), and e-scooters (stand-up kick scooters powered by an electric motor) in all fifty states and the District of Columbia, and created a searchable database summarizing these laws as they may affect SMMS. The survey revealed serious issues and challenges for SMMS, as the development of the legal landscape has failed to keep pace with shared micro-mobility innovations.

Structure of the sharing systems

Two separate models of SMMS have emerged. Some systems have fixed docking stations where bicycles are picked up and returned. Other systems are “dockless,” and use GPS systems and cell phone apps to help users locate available bicycles. The user can leave the bicycle in almost any location when the trip is completed, and the next user can find and claim it for its next use. While bike-share systems have been implemented using both docking and dockless systems, e-bike and e-scooter systems overwhelmingly favor the dockless approach. It is common to see multiple systems using different mobility devices in operation side-by-side in the same municipality, essentially competing with each other. 3 3. Susan Shaheen & Adam Cohen, UC Berkeley: Transp. Sustainability Research Ctr., Shared Micromobility Policy Toolkit: Docked and Dockless Bike and Scooter Sharing (2019), https://escholarship.org/uc/item/00k897b5#main; Nicole DuPuis, Jason Griess & Connor Klein, Nat’l League of Cities, Micromobility in Cities: A History and Policy Overview (Laura Cofsky ed., 2019), https://www.nlc.org/sites/default/files/2019-04/CSAR_MicromobilityReport_FINAL.pdf. ×

These dockless systems raise additional challenges not seen in earlier docked systems. Docked systems typically require some level of municipal cooperation to provide land in ideal locations to place the docking stations as well as lengthy investments of time and capital to get the systems up and running. Dockless systems require none of these. Instead, they can pop-up in a city overnight with little to no notice to any government officials or the general public. This lack of notice and cooperation can lead to serious legal problems down the road.

Regardless of how the SMMS is structured, the legal regime that governs the use of the mobility – rules governing who can ride, where they can ride, how riders must be equipped, etc., as well as riders’ perception of those laws – can have an outsized impact on the success of the system. This project was aimed at ascertaining and analyzing these various laws across the country.

Potential benefits of shared micro-mobility

SMMS serve a wide variety of purposes, including flexible mobility, emission reductions, individual financial savings, reduced traffic congestion, reduced fuel use, health benefits, improved multimodal transport connections, “last mile” connection to public transport, and equity (greater accessibility for minority and lower-income communities). 4 4. Peter Midgley, Urban Mobility Advisor, Address at Global Consultation for Decision Makers on Implementing Sustainable Transport (2019), https://sustainabledevelopment.un.org/content/documents/4803Bike%20Sharing%20UN%20DESA.pdf; Benjamin Schneider, What Keeps Bike Share White, Bloomberg Citylab (July 14, 2017, 9:07 AM), https://www.citylab.com/equity/2017/07/what-keeps-bike-share-white/533412; James Woodcock, et al., Health Effects of the London Bicycle Sharing System: Health Impact Modelling Study, theBMJ (Feb. 13, 2014), https://www.bmj.com/content/348/bmj.g425. ×  Most of these objectives – with the exception of health benefits – are served equally well by e-bike and e-scooter sharing systems.

But while e-bikes and e-scooters cannot deliver the health benefits that would come from getting users to travel under their own power, they offer other benefits that traditional bicycles lack. These include (1) the ability to travel with minimal physical effort, (2) the ability to use without getting sweaty, (3) the capacity to travel longer distances or on hillier terrain, (4) the ability to use in all types of clothing (at least for e-scooters – which are compatible with dresses in a way that bicycles are not) and, (5) the promise of an entirely different level of fun. To the extent that these attractions lure people out of their cars, when traditional bicycles would not, these new micro-mobility sharing systems have the potential to generate societal benefits well beyond the promise of a basic bike-sharing system.

All of these benefits speak strongly in favor of SMMS, suggesting that local governments should be supportive of them. Indeed, some municipalities have invested heavily in these systems, subsidizing them, or otherwise committing public funds to their installation and operation. At the same time state and, to a lesser degree, local governments operate legal regimes that have the potential to undermine all these benefits, particularly where users receive confusing or mixed messages about what is legal and what is not.

This study

The research team set out to examine the relevant laws in all fifty states and the District of Columbia. It developed a list of questions related to sharing platforms, falling into nine categories: Definitions, Age Restrictions, Safety Equipment, Licensing Requirements, Where to Ride, Riding Under the Influence, Insurance Requirements, Sidewalk Clutter, and Shared Micro-Mobility Regulations. The research team then developed a database in Microsoft Access to facilitate the collection, storage and analysis of the state laws, and employed graduate students from the University Of Idaho College Of Law for the summer of 2019 to research the laws in each state and input them into the database.

The researchers used the LexisNexis legal database, Westlaw, and state-operated websites in each assigned jurisdiction to find the relevant laws. Since this is an emerging field of law, many states have legislation pending at various stages of the legislative cycle. For the purposes of this study, any laws that had been fully enacted by the state government were included as the relevant law, even if they had not yet gone into effect. Any laws that were pending in the state legislature or were awaiting the governor’s signature were not considered for this study.

The research team met weekly to discuss any unclear laws and to ensure that similar situations were logged in a consistent manner. After the states were completed, researchers checked a sampling of each other’s work to ensure that the data collection had been done in a consistent manner. Any and all discrepancies that were identified were raised for discussion, clarification, and ultimately harmonization.

Discussion

Even the most cursory review of the data collected reveals some compelling conflicts and gaps in the legal and regulatory regime that governs micro-mobility-sharing systems in the United States. These legal deficiencies threaten the success of such ventures, and limit society’s ability to achieve the myriad benefits that such innovations promise. Most of the examined laws regulate the use of micro-mobility (bikes, e-bikes, and e-scooters) and not sharing systems. While the problems discussed below do not apply exclusively to these shared systems, many of them are made exponentially more problematic because of the typical role shared mobility plays. The following discussion will highlight some of the largest legal problems and the specific difficulties they pose for the successful implementation of SMMS.

  1. Legal Inconsistency/Ambiguity

The most prevalent legal problems the study revealed were the numerous inconsistencies and ambiguities in the laws regulating the use of micro-mobility. Inconsistencies arise in a few distinct ways and each presents a slightly different problem to SMMS. Each of these inconsistencies is no more than a minor inconvenience to experienced riders who are either familiar with their local specifications, or know what kind of laws vary in different states and how to fill those gaps when riding in a new location. Anyone who has invested in a means of micro-mobility is likely to have invested some effort in learning the rules that govern its use. To misquote Socrates, they are wise because they know what they do not know.

However, the inexperienced or recreational rider, or the tourist, may be caught completely unaware of any variation or change in the law. Since these casual or inexperienced riders are the target market for most SMMS, inconsistent laws pose a potentially crippling impediment to their success. In our research laws were grouped into two categories. First, laws that are inconsistent with other laws in the same state, here called internal inconsistency. Second, laws that are inconsistent between states, here called external inconsistency – but perhaps better characterized as state-by-state variations in the law. Before addressing the external consistency issues, we will turn to the more acute problem of internal consistency: where even within a single state, sharp differences, ambiguities, and even conflicts exist in the applicable laws.

a. Internal inconsistency in the laws

While most laws are not facially inconsistent, several states’ statutory schemes create confusion that unnecessarily burdens riders. E-scooters in Oregon, for example, are banned from sidewalks and prohibited from traveling faster than 15 mph. But simultaneously, mobility devices used in the street are prohibited from traveling in the roadway at less than the normal speed of traffic. 5 5. Or. Rev. Stat. §§ 814.512-524 (2020) (Defining the offense of “unlawful operation of a motor assisted scooter.”). ×  Thus, if traffic flows at 25 mph, the scooter is required by law to travel no faster than 15 mph, but no slower than 25 mph. 6 6. The conflict is arguably reconciled Or. Rev. Stat. § 814.520, which suggests that a rider may avoid liability for the separate offense of “improper operation of a motor assisted scooter” for driving too slowly if she keeps as close to the right edge of the roadway as possible. But because it is not clear whether “improper operation” is the same offense as “unlawful operation,” the legal requirements remain, at best, ambiguous. At worst we have an outright conflict. ×   Even if there is a way to read these laws together consistently, it is certainly not clear at first glance. The resident who may want to use the new SMMS to help commute to work or the tourist who wants to use it to get around town cannot easily tell how fast or where they can ride.

Other issues can arise when a state does not clearly define e-bikes or e-scooters. Even when an e-bike or e-scooter is not defined by statute, it may fall within another statutory definition, such as motorcycle, moped, or more broadly, motor vehicle. This categorization can lead to more restrictive regulations of e-bikes and e-scooters, such as requiring driver’s licenses, registration, or insurance. For example, New York does not define e-bike or e-scooter. Because motor vehicles are defined as “every vehicle operated or driven upon a public highway which is propelled by any power other than muscular power,” e-bikes and e-scooters both fall within this category. 7 7. N.Y. Veh. & Traf. Law § 125 (McKinney 2020). ×  New York state law also requires that every motor vehicle be registered in order to drive on public highways. 8 8. N.Y. Veh. & Traf. Law § 401 (McKinney 2020). ×  However, as of 2019, the Department of Motor Vehicles did not allow for the registration of e-scooters or e-bikes, which appeared to render riding these devices in public illegal according to their website at the time. 9 9. Motorized devices that cannot be registered in New York, N.Y. State Dep’t of Motor Vehicles, https://web.archive.org/web/20190316092234/https:/dmv.ny.gov/re gistration/motorized-devices-cannot-be-registered-new-york (last visited July 25, 2020) (That agency site was recently changed to indicate that e-bikes may be operated “on some streets and highways in New York State,” and e-scooters will receive the same treatment later this year). Electric Scooters and Bicycles and Other Unregistered Vehicles, N.Y. State Dep’t of Motor Vehicles, https://dmv.ny.gov/registration/electric-scooters-and-bicycles-and-other-unregistered-vehicles (last visited July 25, 2020). ×  This is but one example of how bureaucratic operations can frustrate legislative actions. The inconsistency, in turn, is likely to result in user confusion.

Additionally, state laws can conflict with the laws of the state’s own counties or municipalities. In an emerging field such as shared micro-mobility, some city ordinances conflict directly with their state law. Direct conflicts are likely to occur when a city chooses a position quickly and the state subsequently adopts a contrary position that is incompatible with the local law without allowing for local variation of the matter. While the state law presumably supersedes the local ordinance, the conflicting local law remains on the books. A couple of examples may illustrate.

Sometimes a local law is more restrictive than a state law, so the discrepancy may not create a direct conflict. California state law, for example, identifies three classes of e-bikes and allows all to be ridden on sidewalks. 10 10. Cal. Veh. Code § 21207.5 (West 2020). ×  West Hollywood, CA, however, recently banned the use of all classes of e-bikes on sidewalks. 11 11. West Hollywood, Cal., Mun. Code § 10.04.030 (2020). ×  In this situation, it is possible for both laws to be valid, depending on whether the state law is read to pre-empt local variation or not. If not pre-empted, the local, more restrictive law simply imposes higher standards than required by the state. Nonetheless, the inconsistency can create difficulties for riders. In King County, Washington, for example, adult users of bicycles are required to wear helmets, but elsewhere in the state they are not. 12 12. King County, Wash., Bd. of Health Code § 9.10 (2018). ×  Once again, the SMMS user – i.e. an occasional or casual rider – is far more likely to be caught off guard.

Finally, state and local laws may define or classify mobility devices differently. For example, the city of Seattle defines e-bikes in a manner that does not mirror the three-category classification system for e-bikes adopted by the State of Washington. 13 13. Seattle, Wash., Mun. Code §11.14.055; Wash. Rev. Code Ann. § 46.04.169 (West 2020). ×  The definition provided by Seattle only encompasses what would be Class 1 and Class 2 e-bikes according to Washington State law, leaving Class 3 e-bikes outside of the city’s definition. This creates the potential for regulatory issues if Class 3 e-bikes are not considered e-bikes at all in Seattle, affecting riders’ abilities to ride on bicycle paths or be subject to other restrictions or protections offered to e-bike riders.

b. Externally inconsistent laws

The legal system has long grappled with the problem of state-by-state variations in the law. Some such variations have been celebrated, where local control has been hailed as a benefit of federalism. But there are limits to how and where such variation can or should be tolerated, and the problems of “external inconsistency” have at times demanded remedial attention. Sometimes the federal government has to step in and pre-empt the field, in order to achieve a desirable consistency in the law: examples include historically federal concerns, including bankruptcy, 14 14. See generally, Oleksandra Johnson, The Bankruptcy Code as Complete Preemption: The Ultimate Trump?, 81 Am. Bankr. L.J. 31 (2007). × securities and banking regulation, 15 15. Jay B. Sykes, Cong. Research Serv., R45081, Banking Law: An Overview of Federal Preemption in the Dual Banking System (January 23, 2018), https://fas.org/sgp/crs/misc/R45081.pdf. ×  immigration, 16 16. See generally, 8 U.S.C. ×  and national security. 17 17. See, e.g., USA PATRIOT Act, Pub. L. No. 107-56), 115 Stat. 272 (2001). In the 1990s, federal jurisdiction expanded to include violence against women. The inability to enforce restraining orders across state lines prompted Congress to federalize an area of law long reserved to the states. Lisa N. Sacco, Cong. Research Serv., The Violence Against Women Act (VAWA): Historical Overview, Funding, and Reauthorization, 3rd ed., (2019), https://fas.org/sgp/crs/misc/R45410.pdf. ×  Other times, states have chosen voluntarily to align their laws with each other’s: examples include the adoption of the Uniform Commercial Code. 18 18. States’ eagerness to facilitate commercial transactions for businesses within the state meant that states were happy to adopt a national standard, so interstate transactions could be more easily affected. At present 49 of the 50 states have adopted all or substantially all of the UCC. Tracey George & Russell Korobkin, Selections from the Restatement (Second) Contracts and Uniform Commercial Code, 4-5 (2019). ×  Similar efforts have yielded an overwhelmingly consistent motor vehicle code, making it easy for drivers to traverse the country without worrying that they will run afoul of obscure and idiosyncratic state laws. At the same time, some areas of law – such as Tort Law and Family Law – have been held to be squarely within the province of the states, where uniformity is not necessarily desirable as a matter of federalism. 19 19. Tort reform laws are all over the map, with all kinds of different approaches taken in the various states. Family Law, of course, has become a battleground as these local variations – affecting the rights of interracial, same-sex, and polygamous unions, among others – have come under attack for perceived violations of constitutional guarantees. See e.g. Reynolds v. U.S., 98 U.S. 145 (1879); Loving v. Virginia, 388 U.S. 1 (1967); Obergefell v. Hodges, 576 U.S. 644 (2015). ×  Justice Louis Brandeis famously praised this aspect of our federal system, noting that “a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” 20 20. New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932). ×

The “laboratories of democracy” concept has borne fruit for micro-mobility use. The state of Idaho adopted in 1982 its “Idaho stop law” that allows cyclists to treat “stop” signs as if they were “yield” signs, and to treat red lights as if they were “stop” signs. 21 21. Asmara M. Tekle, Roll On, Cyclist: The Idaho Rule, Traffic Law, and the Quest to Incentivize Urban Cycling, 92 Chi.-Kent L. Rev. 549 (2017). ×  The resounding success of this experiment has led other jurisdictions to follow suit. 22 22. Delaware has adopted the stoplight portion of the Idaho Stop, redubbing it the “Delaware Yield.” Del. Code Ann. tit. 21 § 4196A(c) (2020). Colorado State law specifically allows for local adoption of either the Idaho or Delaware models but does not adopt either at the state level. Colo. Rev. Stat. § 42-4-1412.5 (2019). Oregon has adopted the limited Delaware model. Or. Rev. Stat. §§ 814.414, 416 (2020). Arkansas has fully adopted the Idaho Stop. Ark. Code. Ann. § 27-51-1803 (2020). Washington has enacted legislation authorizing the Delaware version which will go into effect on Oct. 1, 2020. Increasing Mobility Through the Modification of Stop Sign Requirements for Bicyclists, 2020 Wash. Sess. Laws 6208. ×

At the same time, the patchwork of legal requirements for bicycle and other micro-mobility use in different states may sow confusion, particularly for travelers who may find themselves using bikeshare in different states, or in communities situated on a state border. Such issues arise, for example, on roads surrounding the Chipman Trail bike route, which connects Washington State University in Pullman, Washington (WSU), with the University of Idaho in Moscow, Idaho, eight miles east. At the start of a recent community-organized ride that started on the WSU campus, the riders had to be cautioned that they were in Washington now, and needed to stop at stop signs. 23 23. The Tour de Lentil, associated with the annual Lentil Festival in Pullman Washington, is a 50k/100k/150k ride that takes place every August. John Nelson, Tour de Lentil Provides Challenging Ride Through the Palouse, The Spokesman-Review (Aug. 11, 2017), https://www.spokesman.com/stories/2017/aug/11/tour-de-lentil-provides-challenging-ride-through-t/. The Fondo on the Palouse, a “century” (100-mile ride) which starts in Moscow, Idaho, encounters similar issues, as its route straddles the Washington-Idaho border. About the Fondo on the Palouse, The Fondo on the Palouse, http://fondopalouse.org/ (last visited July 19, 2020). ×  There, the ride was organized by a local cycling club who was familiar with the differences and intricacies of the two states’ laws, so the riders were able to prepare for the change in laws. However, if a solo rider or group of friends decided to take the bikes from WSU’s campus bike sharing program along that same trail for a Saturday ride, they would be unlikely to know that the governing laws had changed on them mid-ride. Absent a reminder or notification of some kind they are unlikely to even think to look up the law to see if there was any discrepancy.

While the laws governing cars are largely consistent across the country, inconsistency persists in the laws applying to bicycle use and even more so in those governing e-bike and e-scooter use. This is a particular concern given that a significant number of users of such systems are travelers and tourists – people from outside the relevant jurisdiction and therefore ill-equipped to know local laws. 24 24. Virginia Tech, Virginia Tech Capital Bikeshare Study: A Closer Look at Casual Users and Operations 10 (2012), https://ralphbu.files.wordpress.com/2012/01/vt-bike-share-study-final3.pdf. ×  Similar problems emerged in the early days of automobiles, and the need for consistent laws governing motor vehicle transportation became apparent. A special committee was appointed at the federal level to draw up a uniform code – one that facilitated effective automobile use – and pressure was put on the state legislatures across the country to adopt it. This eliminated idiosyncratic rules that may have existed in different cities and states and allowed manufacturers to produce vehicles that were legal in every state. 25 25. See J. Allen Davis, The California Vehicle Code and the Uniform Vehicle Code 14 Hastings L. J. 377 (1963). ×  Drivers could then have some confidence of the rules of the road when crossing state lines. While traffic laws are not entirely uniform in the U.S. (e.g. some states – including Washington, Oregon, and Idaho – allow left turns on red lights when the driver is turning onto a one-way street, for example), the exceptions are very few and largely minor.  Even the traffic signals and signage have been made standard across jurisdictions. 26 26. This standardization occurred over time as automobiles became more widespread. Clay McShane, The Origins and Globalization of Traffic Control Signals, 25 J. of Urban History 379, 389 (1999), https://sites.tufts.edu/carscultureplace2010/ files/2010/09/McShane-traffic-signals-1999.pdf. ×  Efforts to bring uniformity to the laws governing cycling – much less to the laws governing the use of e-bikes, e-scooters, or SMMS in general – have yet to bear fruit.

Laws that dictate where each platform can and cannot be ridden, “where to ride” laws, present particularly troublesome external inconsistency. Most states allow bicycles to be ridden on the sidewalk or the street so the rider can choose to ride where they feel the most comfortable. However, e-bikes and e-scooters, the primary platforms for dockless SMMS, are restricted much more and far less consistently. E-bikes are burdened slightly, as in about half of states they cannot be ridden on sidewalks. E-scooters, as the newest platform on the scene, are treated the most inconsistently. Over a third of states do not have any regulation at all regarding where e-scooters are allowed. 27 27. See infra Section 2.b. and Figure 4. ×  In those states that do address e-scooters, about half allow them to be ridden on the street and half do not. A handful of states prohibit e-scooter use on the shoulder of the road or the bike lanes. Twenty-three states allow e-scooters to be ridden on sidewalks while six prohibit their use there; the remaining states are silent on the issue. If an individual purchases one of these platforms, especially an e-scooter, it is reasonable to expect that they would look up the rules for the use of their new device in their own state. 28 28. A neighbor of author David Pimentel, however, acquired a motorized scooter in 2019, and after a discussion with a police officer, is now afraid to ride it anywhere. The police officer was unable to advise him where, or whether, such a vehicle could be used in the city limits. ×  However, it seems far less likely that the typical SMMS user would know the details about where they are allowed to ride or take the time to research the question, even if it were easy to find answers, which it often is not. Further, many riders who do not know where they can ride may forgo using the SMMS altogether because of their questions.

Other types of laws also raise external inconsistency issues. For instance, helmet laws vary dramatically in various states (see Figures 1.1 and 1.2). In over 20 states, there is no requirement that anyone wear a helmet when using a bicycle, an e-bike, or an e-scooter. Many states impose helmet requirements on bicycle riders under a certain age. Six states require helmets for all users of e-bikes.

FIGURE 1.1 – Mandatory Helmet Laws

Helmets are required . . .

FIGURE 1.2 – Mandatory Helmet Laws

Helmets are required . . .

Laws requiring helmet use can be particularly burdensome for bike-sharing systems because the typical user does not carry a helmet with her/him. 29 29. Gigi Douban, A Pothole for Bike-Sharing Programs: Helmets, Marketplace Morning Report (Sep. 4, 2015), https://www.marketplace.org/2015/09/04/business/pothole-bike-sharing-programs-helmets/; David Gutman, Will Helmet Law Kill Seattle’s New Bike-Share Program?, Seattle Times (Dec. 19, 2016), https://www.seattletimes.com/seattle-news/transportation/will-helmet-law-kill-seattles-new-bike-share-program/; Emily Elias, Helmets Pose Challenge For Vancouver Bike Share Program, CBC (July 19, 2013) https://www.cbc.ca/news/canada/british-columbia/helmets-pose-challenge-for-vancouver-bike-share-program-1.1379433. × Attempts to share helmets along with bikes have not been well received by the public, presumably because of concerns about the cleanliness of shared helmets. 30 30. Gutman, supra note 29. × Some speculate that the failure of Seattle’s first bike-share venture was due to the strictures of the mandatory helmet law there; 31 31. Id. × more recent success with SMMS in Seattle may be due to local police’s decision to relax their enforcement of King County’s mandatory helmet laws. 32 32. David Gutman, Helmets may be Seattle Law, but Many Bike-Share Riders Don’t Wear Them, Seattle Times, (Aug. 9, 2017), https://www.seattletimes.com/seattle-news/transportation/helmets-may-be-seattle-law-but-many-bike-share-riders-dont-wear-them/. ×

The “ins.tructions” commonly provided by the micro-mobility sharing services are unhelpful on this score, as they may simply tell the user to wear a helmet, without indicating whether the helmet is required by law (e.g. the instruction video for Bird scooters, inside the Bird app, includes a “Bring your own helmet” instruction, without further elaboration to clarify whether this is a legal requirement or just a prudent recommendation). 33 33. App: Bird, How to Ride, (Bird Rides, Inc.) (available on Google Play or the Apple App Store), www.bird.co/how/. × This uncertainty can serve as a deterrent to would-be riders. 34 34. Ronald W. Pimentel, Michael B. Lowry, David Pimentel, Amanda K. Glazer, Timothy W. Koglin, Grace A. Moe, & Marianna M. Knysh, If You Provide, Will They Ride? Motivators and Deterrents to Shared Micro-Mobility, 6 Int’l J. Bus & Applied Soc. Sci. 26, 31 (2020). ×

E-bike and e-scooter riders also face uncertainty about the application of Driving Under the Influence (“DUI”) laws. In many states, it is not at all clear whether the e-bikes and e-scooters qualify as “motor vehicles” for purposes of DUI statutes. A small handful of states have attempted to clarify this by passing separate laws governing Riding Under the Influence (“RUI”), which explicitly apply to micro-mobility users. These laws typically impose lesser punishments for RUI than the state imposes for DUI violations, which makes sense since an intoxicated driver is endangering the lives of others (pedestrians, car passengers, etc.) at a level far beyond the dangers posed by an intoxicated e-scooter rider. A general breakdown of state law treatment of these issues is shown in Figure 2.

FIGURE 2 – “Riding Under the Influence” Legislation*

*A few states have both RUI laws specifically applicable to micro-mobility, and separate DUI laws that apply equally to micro-mobility, introducing potential for contradiction and inconsistency (see discussion of such issues above). The states that fall into both the DUI and the RUI categories are depicted in the “RUI Law Applies” section of the pie charts above.

Naturally, some level of inconsistency is necessary. Not every community has the same needs, and the laws that are appropriate in New York City may not be appropriate in Moscow, Idaho (pop. 24,000). However, a common foundation of legal rules for micro-mobility use, short of complete uniformity, is important if those transportation modalities are to take hold in American cities. For instance, some kind of baseline system that applies broadly but allows for limited local variation based on the specific needs of the location, where those local variations could be clearly demonstrated to potential riders, would go a long way to solving both internal and external inconsistency issues.

  1. (Lack of) Awareness of the law

Even if inconsistent laws were aligned, micro-mobility users still might not know what the laws are. Someone who is unaware of the law will have difficulty complying with it and, as noted above, the uncertainty may scare riders off altogether.

a. Ignorance and (mis)perception of the applicable laws

It is far from clear, even for a lawyer trained to interpret statutes, which existing laws may apply to a particular mode of micro-mobility. In some states, the term “pedestrian” is interpreted to include bicyclists on sidewalks, so laws that give pedestrians the right-of-way simultaneously give bicyclists the right-of-way. 35 35. E.g. Mich. Comp. Laws § 257.660c (2020). × In thirty-five states, the word “vehicle” is interpreted to include bicycles, which lumps bicycles in with other vehicles and subjects them to the laws governing vehicular traffic. 36 36. E.g. Or. Rev. Stat. § 814.400 (2020). ×

As for e-bikes and e-scooters, the problem is even more difficult. Because most of these laws were passed before e-bikes and e-scooters came on the market, laws cannot reflect the legislature’s intention concerning them. Pullman, Washington, requires that all scooters be equipped with a “muffler,” for example, in an ordinance that must have been drafted during an era of gas-powered scooters; 37 37. Pullman, Wash., Code § 12.11.020(8) (2019). × it is, of course, a ridiculous requirement to impose on virtually silent e-scooters. Even the most well-informed user is left to wonder whether an e-bike is a “motor-driven cycle” within the meaning of the statute, for example, or whether an e-scooter is a “motor vehicle.” Exacerbating the problem, there does not appear to be any consensus or consistency, state-by-state, on what these terms mean.

Potential users of SMMS being unaware of the laws governing the mobility presents two separate problems. The first is that users may unwittingly violate the law. They may assume that e-scooters are legal on sidewalks, and ride them there, illegally disrupting pedestrian traffic and unwittingly subjecting themselves to liability. The second concern is that the uncertainty itself will be a deterrent to use of the mobility. A potential user may be tempted to rent a scooter or a bike but may err on the side of caution and avoid using the device altogether when unsure of whether it’s legal to ride without a helmet, or to ride without a driver’s license, or to ride on the running path that goes through the park or along the river. A July 2019 survey of users and non-users in the Northwest suggest that uncertainty about the law can significantly discourage use of SMMS. 38 38. Pimentel, supra note 34, at 31. × Uncertainty about where it is legal to ride provides at least a slight deterrent effect for 74% of potential users (See Figure 3).

FIGURE 3 – Deterrent Effect of Legal Uncertainty

b. Statutory silence

The lack of legislation in many jurisdictions leaves both the purveyors of SMMS and their customers in the dark about what is legal and what is not. The laws are reasonably comprehensive as they apply to bicycles, but significant gaps exist for newer technologies, particularly e-scooters, which do not fit so easily into pre-existing categories. While some states are already working to get laws on the books that govern the use of such mobility, many more legislatures either have failed to perceive a need or have been unwilling or unable to muster the political will or material resources to respond to it. Figure 4 shows the conspicuous gaps which exist in several states’ legislation regarding where riders can use various devices, particularly e-scooters. It unrealistic to expect states to have comprehensive legal regimes in place regarding these newer devices; it is understandable that legislatures may have trouble keeping up with new technologies. However, SMMS will be hamstrung in any states that fail to grapple with basic issues, such whether these devices can be ridden on their sidewalks, or on their streets, or on both, or on neither.

FIGURE 4 – Where to Ride Table

c. Emerging legislation

By 2019, new laws were in the works in a number of states. New York’s legislature introduced a bill that defined “bicycles with electric assist” and “electric scooters,” stipulating that e-bikes are subject to the same regulations as bicycles while e-scooters are subject to new regulations laid out in the bill. 39 39. S.B. 5294 (N.Y. 2019). The bill was vetoed by the Governor in December 2019. × The Hawaiian legislature introduced two separate bills to govern the use of these devices. The first set a minimum age of fifteen for e-bike riders, and included e-bikes within the definition of bicycles, thus subjecting them to most of the same regulations that govern non-motorized bicycles. 40 40. H.B. 812 (Haw. 2019). × The second defined “electric foot scooters,” set a minimum riding age of fifteen, and subjected e-scooters to many of the same laws that govern bicycles. 41 41. H.B. 754 (Haw. 2019). × Similarly, Alaska introduced a bill that defined e-bikes without a classification system, and clarified that they are not motor vehicles or subject to any registration requirements. 42 42. H.B. 123 (Alaska 2019) ×

The wave of new legislation presents both challenges and opportunities for SMMS. If the laws passed aid the implementation and operation of SMMS or facilitate the platforms that they use, then SMMS may be well on their way to becoming a permanent fixture of American cities. Additionally, states have the opportunity to see what laws are the most successful and to copy them, laying the groundwork for a more consistent, if not entirely uniform system. One example is the three-tiered e-bike classification system. This system was first implemented in California in 2015 and has since been adopted almost completely in twenty-five other states, making it by far the most common classification system. 43 43. Claudia Wasko, Why More States Need to Adopt the Three-Class Ebike System, Bosch, https://www.bosch-ebike.com/us/everything-about-the-ebike/stories/three-class -ebike-system/# (“In 2015, California was the first state to adopt this ‘3-Class’ approach, and since then, 25 other states followed suit: Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Maine, Maryland, Michigan, New Hampshire, New Jersey, Ohio, Oklahoma, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming.”). × A consistent and coherent classification system is a prerequisite to any unified e-bike laws that could come in the future. However, advocates (including SMMS providers) must act quickly to lobby for favorable laws, as it will become much harder to implement favorable laws after states have enacted barriers.

  1. Laws addressing shared micro-mobility implementation and use directly

Some states have adopted laws that focus on sharing systems, recognizing the difference between regulating e-bike or e-scooter use and regulating the businesses or systems set up to share them. As of this writing, Alabama is the only state that has comprehensive shared micro-mobility law that covers bicycles, e-bikes, and e-scooters. Four other states, Arkansas, Nevada, Utah, and Washington, have enacted statewide regulations concerning e-scooter sharing systems exclusively. However, most states’ statutory schemes are either silent on this issue or leave the regulation of these systems to the local government.

Without any laws regulating the sharing systems directly, many problems are likely to arise which are specific to SMMS. One such problem is the “pop-up” SMMS start-ups. Without statewide regulations in place, SMMS providers may be able to enter a market more or less overnight with no warning to the local government. This presents a number of problems, many of which have already been discussed. These problems can be prevented with simple state-wide schemes which include regulations for startup procedures that allow SMMS to operate but require additional cooperation between the providers and the cities they serve.

Even when states do enact SMMS-specific laws, another issue emerges: shared micro-mobility laws that differ from the existing laws. For example, Alabama defines a “scooter” as:

[A] device weighing less than 100 pounds that satisfies all of the following:

(a)  [h]as handlebars and an electric motor;

(b)  [i]s solely powered by the electric motor or human power; [and]

(c)  [h]as a maximum speed of no more than 20 mph on a paved level surface when powered solely by the electric motor. 44 44. Ala. Code § 32-1-1.1(60) (2020). ×

By this definition, an e-scooter would qualify simultaneously as a “scooter” and as a motor vehicle in the Alabama Code. 45 45. Ala. Code § 32-1-1.1(33) (2020). × Conversely, the definition for a “shared micromobility device” is a type of transportation device, including a scooter that is used in a shared micro-mobility device system. 46 46. Ala. Code § 32-1-1.1(64) (2020). × The “shared micromobility device[s]” are subject to the same laws and regulations as a bicycle, and not a motor vehicle. 47 47. See e.g. Seattle Times Editorial Bd., Opinion, Hold Bike-Share Vendors Accountable, Seattle Times (Sep. 5, 2019), https://www.seattletimes.com/opinion/editorials/hold-bike-share-vendors-accountable/; Quemuel Arroyo, Op-ed: Where Do We Put All Those Dockless E-Scooters?, StreetsBlog NYC (Feb. 4, 2020), https://nyc.streetsblog.org/2020/02/04/op-ed-where-do-we-put-all-those-dockless-e-scooters/; Elizabeth Chou, LA Looks to Improve Parking of Dockless Scooters and Bikes. Here’s How, L.A. Daily News (Oct. 22, 2019), https://www.dailynews.com/2019/10/22/la-looks-to-improve-parking-of-dockless-scooters-and-bikes-heres-how/. × As a result, scooters that are privately owned are subject to rules and regulations pertaining to motor vehicles, such as licensing requirements, while scooters that are used within a SMMS are subject to a different set of rules and regulations, including an exemption from the licensing requirement.

  1. Parking and Storage

While there are several deficiencies in the laws governing SMMS (including the absence of them), the research painted a more encouraging picture about the problems of parking and storage. One of the most common complaints about dockless systems is the concern that the bicycles, e-bikes, or e-scooters get left in inconvenient places. 48 48. See Arroyo, supra note 48. × Accordingly, the research team looked at the laws governing the problem.

Part of the concern is one of untidy or unsightly clutter, but the greater concern is about obstructing sidewalks and other thoroughfares of pedestrian traffic, creating a nuisance and a safety-related tripping hazard, as well as limiting access to the sidewalk for people with disabilities. 49 49. See Arroyo, supra note 48. × While this concern often prompts critics to call for banning SMMS, 50 50. Leif Reigstad, The Rise and Fall of Dockless Bike Sharing in Dallas, Texas Monthly, (Aug. 7, 2018), https://www.texasmonthly.com/news/rise-fall-dockless-bike-sharing-dallas/. × most states already have statutes that address the issues of clutter or obstruction, and the problem is simply a matter of finding a way to enforce these laws in the context of shared bikes, e-bikes, and e-scooters. Alabama, the state with the most comprehensive statewide shared micro-mobility legislation, specifically prohibits shared micro-mobility devices from being parked in a manner that impedes normal pedestrian movement. 51 51. Ala. Code § 32-19-2(c) (2020). × However, many other states that currently lack shared micro-mobility legislation already have laws that prohibit all vehicles or specific micro-mobility devices from impeding pedestrian and other traffic. Still others list specific locations where such vehicles can and cannot be parked or delegate such decisions to local authorities. In total, thirty states already have statutes preventing micro-mobility devices from being strewn on or about the sidewalks.

Since laws preventing SMMS devices from cluttering the street are already in place, the problem may come from the difficulties of enforcement. Law enforcement may be hesitant to seize or ticket SMMS devices without clear directives. They are also likely even more hesitant to ticket a user who leaves them in an improper location because they plausibly may not know the requirements. Perhaps comprehensive SMMS laws such as those discussed above can help clarify these laws with regard to shared devices and enable law enforcement to manage the situation more effectively.

This problem may be one of perception more than reality. People are more likely to remember the few times they were walking down the sidewalk and had to step around an obstructing scooter or bicycle than they are to remember the countless times that they walked down the street without any such obstruction. Or they may remember an inflammatory picture they have seen in the press of unwanted and unloved bike-share bikes heaped in huge piles, and perceive a problem in the U.S., even though those pictures were taken in China. 52 52. See generally, Dan Gardner, The Science of Fear: Why We Fear the Things We Shouldn’t-- and Put Ourselves in Greater Danger (2008) (discussing the “availability heuristic”). × Indeed, despite conspicuous complaints about the clutter associated with shared micro-mobility, 53 53. Reigstad, supra note 50. × a study in Spokane Washington found the problem to be at most minor (finding that 96% of e-scooters were parked in a “preferred area” and that 98% of them were parked upright). 54 54. Toole Design, Spokane Shared Mobility Study Final Recommendations 18 (2019), https://static.spokanecity.org/documents/projects/shared-mobility/spokane-shared-mobility-report.pdf. ×

  1. Creating laws that favor bicycles and other micro-mobility to further promote SMMS

Laws that make bicycling, and other micro-mobility use easier will necessarily make SMMS more attractive to potential users; and laws that burden the mobility-user will have the opposite effect. The Idaho stop laws, for example, make cycling vastly more efficient and attractive. 55 55. See Tekle, supra note 21. × State laws that expect cyclists to adhere to the laws that govern motor vehicles, in contrast – failing to account for the fact that bicycles have different capabilities, needs, and safety concerns – impose heavier burdens on cyclists and place them at greater risk of harm. 56 56. David Pimentel, Cycling, Safety, and Victim-Blaming: Toward a Coherent Public Policy for Bicycling in 21st Century America, 85 Tenn. L. Rev. 753 (2018). ×

As noted above, mandatory helmet laws may also be a barrier to SMMS success. While it is tempting to cling to these laws as a fundamental safety measure, such laws have been sharply criticized as counter-productive, from a safety perspective, 57 57. Luke Turner, Australia’s Helmet Law Disaster, 64 IPA Review 28, 28–29 (Apr. 2012), http://www.vehicularcyclist.com/ozdisaster.pdf; Craig Baird, Bike helmets can make roads more dangerous for cyclists, says Bike Regina, Regina Leader-Post (May 2, 2017), https://leaderpost.com/news/local-news/bike-helmets-can-make-roads-more-dangerous-for-cyclists-says-bike-regina; Sue Knaup, Are Helmet Programs Scaring Kids Away from Bicycling?, The Bike Helmet Blog (Nov. 10, 2015), https://www.bikehelmetblog.com/2015/11/are-helmet-programs-scaring-kids-away.html. × and for the implicit message that micro-mobility is very dangerous and therefore something to be avoided. 58 58. Rosenthal, E., To Encourage Biking, Cities Lose the Helmets, N.Y. Times (Sept. 29, 2012), https://www.nytimes.com/2012/09/30/sunday-review/to-encourage-biking-cities-forget-about-helmets.html; Knaup, supra note 57. × That message, as well as the victim-blaming message that responsibility for cyclist safety lies solely with the cyclist, rather than with the drivers who hit them, can only discourage ridership. 59 59. Peter Walker, The Big Bike Helmet Debate: “You Don’t Make it Safe by Forcing Cyclists to Dress for Urban Warfare,” The Guardian (Mar. 21, 2017), https://www.theguardian.com/lifeandstyle/2017/mar/21/bike-helmet-cyclists-safe-urban-warfare-wheels; Pimentel, supra note 56. ×

Laws that permit, or prohibit, riding bicycles on sidewalks or off-road paths and trails may have an impact as well. If people know that they can be cited for riding where they feel safe to ride, they may opt not to ride at all. For example, in a busy urban center, someone may be happy to ride an e-scooter on the sidewalk, but if they know that e-scooters are legal only in the street (as is the case in the states of Washington and California), they may stay off the scooter altogether. 60 60. Cal. Veh. Code § 21235(g) (Deering 2020); Wash. Rev. Code Ann. § 46.61.710 (LexisNexis 2020). ×   Of course, the laws of states, such as Florida and South Dakota, that ban the use of scooters in the streets too, or of the twenty states that are silent on the subject, generate serious uncertainty about whether they can be used legally anywhere.

Conclusions

The wheels of transportation innovation turn much faster than the wheels of legislation. The legal system struggles, playing catch-up with industry changes. That alone does not necessarily constitute a problem. However, the lack of a legal infrastructure may threaten to stifle the innovation and undermine the potential benefits of SMMS in America. This comprehensive study of applicable laws exposes the gaps and inconsistencies in these laws and illustrates some of the impact of these legal deficiencies. The hope is that federal authorities may intervene, promulgating standardized legal rules for shared micro-mobility, as they have for automobiles, which would clarify and harmonize the scattershot approach heretofore taken. If the federal government is unwilling or unable (politically or otherwise) to act, perhaps interested parties – bicycling advocates, safety advocates, industry representatives, and regulators – can combine forces to produce a “uniform law,” one that states may be willing to adopt, much as they have the Uniform Commercial Code. The searchable database of the compiled state laws on this subject created in this study can support such efforts, as well as future research. In the meantime, innovators should be aware of and sensitive to how the variegated legal landscape may impact the results and the future of shared micro-mobility.


David Pimentel is Associate Dean and Professor of Law at the University of Idaho. Before beginning his academic career, he served as staff in the U.S. federal judiciary, including one year as a Supreme Court Fellow, before going abroad to do rule of law development work in post-conflict countries (Bosnia, Romania, and South Sudan). He also spent four years with a United Nations war crimes tribunal in the Netherlands, where he developed an appreciation for cycling as transportation. Intrigued by Idaho’s bicycle laws, he has recently published scholarship on the public policy behind legal regulation of bicycle usage and of shared micro-mobility systems.

Dr. Michael Lowry is an associate professor of Civil Engineering at the University of Idaho with a research focus on transportation planning. He serves on the National Academy of Science Committee for Bicycle Transportation and the Committee for Transportation Investment Decision-Making. He teaches courses on transportation safety, benefit-cost analysis, and geographic information systems. He was awarded the College of Engineering Outstanding Young Faculty award for excellence in teaching and research. Dr. Lowry has been a visiting scholar in Spain, Norway, the Netherlands, and the United Kingdom.

Timothy W. Koglin is a recent graduate of the University of Idaho College of Law and (soon to be) member of the Washington State Bar Association. He spent time at the United States Military Academy and Washington State University before graduating from Liberty University with a B.S. in History. He spent the last two years of law school as the research assistant for David Pimentel working on a wide range of legal topics including parenting, sports, and transportation.

Ronald W. Pimentel has been a marketing professor for 30 years and also had a 12-year career in industry doing marketing and sales. He completed a BA in Art/Design at BYU, an MBA at UC Berkeley, and a Ph.D. in marketing at The University of Arizona. He is currently a Scholarly Associate Professor of marketing and the Faculty Director of the Professional Sales Certificate program at Washington State University Vancouver. Ron has published three book chapters, and many journal articles and conference proceedings. Recent research has included inter-disciplinary work on shared micro-mobility.

For the past two years, the purpose of this blog and the Law and Mobility Program has been to peak around the corner and see what’s next. We have explored the legal and policy ramifications of emerging transportation technologies and tried to figure out how those technologies, be they automated vehicles, e-scooters, delivery drones, or even flying cars, will fit into our existing transportation and legal systems.

As it has with so many aspects of our lives, the COVID-19 pandemic has complicated our ability to look forward – the world to come is harder to predict. How close to “normal” will we get without a vaccine or treatment? If a significant portion of the workforce moves to remote work (Twitter, for example, is going to a permanent remote work option), what does that mean for our transportation system? Will people retreat from large, dense cities? As the pandemic disrupts state and local budgets, what will happen to transportation budgets? Right now, there are no clear answers.

Going forward, this blog and the Law and Mobility Program will remain focused on the future, with a keen eye on today. We will still explore new technologies and their ramifications, while also seeking a better understanding of how the current crisis is altering the mobility landscape. Later today we’ll publish the first of a series of blog posts dealing with some of the specific disruptions and changes that are already occurring. We hope you’ll enjoy these posts and, as always, invite you to join us in the conversation by submitting posts of your own – outside blog post submissions (of 500-1,000 words) are always welcome at JLMsubmissions@umich.edu (all submissions are evaluated for publication by our staff).

Here you will find more information on the Expert Participants who are taking part in our 2020 conference, including bios and links to their websites and work:

  • Silvia Stuchi Cruz – Founder, CorridaAmiga (Brazil)

Silvia Stuchi Cruz is a Postdoc in Sustainability at the University of Sao Paulo, with emphasis on active mobility. She has previously served as an environmental manager at the University of Sao Paulo, and holds a PhD in Scientific Policy and Technology from State University of Campinas. While completing her PhD she interned at the University of Science and Technology in Lille/ France, and was a visiting student researcher at the VTT Technical Research Centre of Finland. Silvia has 8 years of experience in sustainability and climate change, along with 6 years of work on pedestrian mobility. A passionate active transportation advocate, she is the founder of the NGO “Corrida Amiga” which works with Brazilian communities (public schools, as wel as institutions for elderly people and people with disabilities) to promote pedestrian mobility and to develop projects, campaigns and tools related to walkability, accessibility and right to the city.   

  • Dr. Rohit Baluja – Chairman, Institute of Road Traffic Education (India)

Rohit Baluja has a PhD in Civil Engineering from the University of Birmingham. Rohit is now a visiting faculty at the School of Civil Engineering, University of Birmingham as well as at the Sardar Vallabhai Patel –Indian National Police Academy, Hyderabad.

Rohit established the Institute of Road Traffic Education (IRTE)as a not for profit organisation in New Delhi  1991, which has led to the establishment of the College of Traffic Management in the NCR Delhi which is the only single umbrella facility for research and training in all the areas of traffic management. The College of Traffic Management has now been recognised as the Centre for Excellence in Road Safety for the South East Asian Region.

Rohit is a Member at the United Nations Road Safety Collaboration. As President IRTE, he is Observer at the United Nations Global Forum for Road Traffic Safety (Working Party 1). The IRTE has been granted the Roster Consultative Status by the United Nations Economic and Social Council and have recently signed an MOU with the United Nations towards promoting road safety in South East Asia.

  • He Shanshan – Partner, Anli Partners (China)

He Shanshan is the head of Autonomous Driving Law Centre of Intelligent & Connected Mobility Academy, and leader of Automobile and Artificial Intelligence Group of Anli Partners. Ms. He Shanshan is also the member of Autonomous Driving Expert Committee of Beijing.

Shanshan has been closely working on the automated driving projects and conducting research and advice on law, policy, ethics and standards regarding AI and autonomous driving. She also keeps close communication and cooperation with industry field, academic field and relevant authorities domestically and overseas on AI and autonomous vehicles. 

Shanshan obtained the bachelor of law degree and master of law degree from Tsinghua University School of Law, the master of law degree from Columbia University in New York. She is both qualified in P.R. China and New York.  Her previous experience includes work in an international law firm and the legal department of an international automobile company.

  • Luiz Otávio Maciel – Miranda Advisor, Traffic Department of State of Pará (Brazil)

Luiz Otávio Maciel Miranda is an advisor at the Traffic Department of the State of Pará – DETRAN/PA, where he has worked since 1983. He is the Brazilian delegate at the Global Forum for Road Traffic Safety (WP.1) of the United Nations Economic Commission for Europe (UNECE) since 2016. Counselor at the National Traffic Council (CONTRAN) representing the Ministry of Health, working on the drafting of National Road Safety Regulations and the enforcement of the Brazilian Traffic Code. He worked as a consultant at the Global Road Safety Partnership (GRSP) at the Bloomberg Philanthropies Global Road Safety Programme (BPGRSP) and the Bloomberg Initiative for Global Road Safety (BIGRS) for Brazil. He worked as an advisor at the National Traffic Department (DENATRAN), Technical Consultant at the Ministry of Health and Counselor at the State Traffic Council (CETRAN/PA)

Mr. Miranda graduated from Federal University of Pará with degrees in Civil Engineering (1985), Mathematics (1983) and Science (1982).

  • Pramanand Gopaldu – Lead Engineer, Traffic Management and Road Safety Unit (Mauritius)

Pramanand Gopaldu is a Lead Engineer for Traffic Management and Road Safety, a department under the aegis of the Ministry of Land Transport and Light Rail in Mauritius. For the past 15 years he has devoted much of his practice to maximize road safety and to address road traffic issues.

Mr Gopaldu graduated from the University of Mauritius, with a bachelor degree in Civil Engineering in 1994. He then earned his Master’s degree in Traffic from Monash University, Australia, in 2012.

  • Phil Monture – (Six Nations of the Grand River)

Beginning in 1975, Phil developed a long-term research program and supervised the research for the Six Nations of the Grand River as relates to lands which are no longer used for their benefit or legal surrender obtained under prevailing legislation. He was the principle architect of the ongoing 1995 litigation against Canada and Ontario for an accounting of all Six Nations Lands, resources and assets supposedly held and managed on Six Nations behalf by the Crown(s). 

Phil has also been active in taking Six Nations unresolved Land Rights issues to the United Nations and working with developer proponents utilizing the legal duty to consult and accommodate; implementing the UN Declaration on the Rights of Indigenous Peoples and its requirement to obtain our free, prior and informed consent. This has enabled the Six Nations Peoples to have partnerships and beneficiaries of over 1,000 MGW of Green Energy developments within Six Nations Treaty lands.

Utilizing Six Nations’ Sovereign Treaty relations with the Crown, Six Nations have undertaken protective measures through the Climate Development Mechanism of the UN to assert certain initiatives to counter climate change and to enhance their environment.

  • Raymond Hess – Transportation Manager, City of Ann Arbor (US)

Raymond Hess is Transportation Manager for the City of Ann Arbor, Michigan. Alongside a passionate team, he implements transportation initiatives that aim to improve safety and the livability of the community. Previously, he was Director of Planning Services at the Regional Transportation Commission of Southern Nevada and oversaw the Metropolitan Planning Organization for the greater Las Vegas Valley as well as a regional sustainable communities initiative known as Southern Nevada Strong. Prior to joining the RTC, Raymond worked for the City of Bloomington (IN), the City of Brooksville (FL) and was a Peace Corps Volunteer in the Ivory Coast West Africa.

  • Ellen Partridge – Policy and Strategy Director at Shared-Use Mobility Center (US)
Ellen Partridge has nearly 20 years of work in public transit administration and operations at both the federal and transit agency levels. She was appointed Chief Counsel for the USDOT Research and Innovative Technology Administration and also served as Deputy Assistant Secretary for Research and Technology and Chief Counsel for the FTA. She is intimately familiar with the legal and regulatory landscape of public transit, including the nuances of public agency partnerships with private mobility providers.
 
At the Chicago Transit Authority, she focused on policy initiatives – first as Deputy General Counsel for Policy and Appeals and then in the Strategic Operations unit that deployed new technology and trained supervisors on how to use it to improve bus service. Before joining the nation’s second-largest transit agency, she practiced environmental law with the firms of Jenner & Block in Chicago and Van Ness Feldman in Washington, D.C. She lived in the Republic of Palau, serving as counsel to its government as it transitioned from being a United Nations Trust Territory to independence.
 
While practicing law, she taught environmental and natural resources law as an adjunct professor at Northwestern University and DePaul University Law Schools. Ellen is a fellow with Leadership Greater Chicago, was awarded a fellowship with the German Marshall Fund and was a Senior Fellow with the Environmental Law and Policy Center. She earned her law degree at Georgetown University Law School and an MBA from the University of Chicago.
 
  • Daniel Arking – Counsel, Department of Law, City of Detroit (US)

Daniel Arking is an Assistant Corporation Counsel in the City of Detroit Law Department. In this role, Daniel works on a variety of regulatory and transactional matters related to land use and zoning, recreation, transportation and mobility, and public private partnerships. In the mobility space, Daniel has worked with the City’s mobility innovation team to expand access to a variety of transportation options, including the development of guidelines for the operation of dockless electric scooters in Detroit. Since then, multiple scooter operators have deployed over 1,000 scooters in neighborhoods across the City with notable success.

Prior to joining the Detroit Law Department in 2015, Daniel served as an Associate in the Washington DC office of Holland & Knight LLP and as an aide in the New York City Mayor’s Office under the Bloomberg Administration. Daniel holds a Juris Doctor from the Georgetown University Law Center and a Bachelor of Arts in Physics from the University of Chicago.

  • Jeff P. Michael, EdD – Distinguished Scholar and Leon S. Robertson Faculty Development Chair in Injury Prevention, Health Policy and Management, Johns Hopkins University (US)

Dr. Michael is an accomplished national and international leader with demonstrated leadership in analysis, development and implementation of programs to improve road safety – both in the United States and in other nations. As the Leon S. Robertson Faculty Development Chair in Injury Prevention, Dr. Michael’s current research focuses on the development of strategies for utilizing emerging mobility technologies to improve safety and reduce health disparities. The combination of artificial intelligence, shared rides and electric vehicles is predicted to transform mobility patterns in the next decade.  Inherent in this transformation is the potential to deliver mobility services to populations that have historically suffered from limited access to health care, nutritious food and economic opportunities. However, the prevailing market-driven mobility movement is unlikely to reach these underserved populations absent a deliberate scientific and policy initiative dedicated to this purpose.

As Coordinator of the New Mobility Initiative at the Center for Injury Research and Policy, Dr. Michael is leading an effort to develop evidence-based policy models to steer the deployment of New Mobility products and services for public health benefit. The New Mobility Initiative is working closely with the City of Baltimore to conduct and evaluate mobility experiments and policy evaluations.  

  • Emily Frascaroli – Managing Counsel, Product Litigation Group, Ford Motor Company (US)

Emily Frascaroli is managing counsel of the Product Litigation Group at Ford Motor Company, including the product litigation, asbestos, and discovery teams. She also advises globally on automotive safety, regulatory, and product liability issues, including a focus on autonomous vehicles and mobility. She has extensive experience handling complex product litigation cases, regulatory matters with the National Highway Traffic Safety Administration and other governmental entities, and product defect investigations. She also is co-chair of the Legal and Insurance Working Group for the University of Michigan’s Mcity. In 2017, she was appointed by Gov. Rick Snyder to the Michigan Council on Future Mobility, and in 2019 she was appointed by Ohio Gov. John Kasich to the DriveOhio Expert Advisory Board.

She earned her JD, cum laude, from Wayne State University and was an editor of the Wayne Law Review. She received her BS in aerospace engineering from the University of Southern California and her MEng in aerospace engineering from the University of Michigan. Prior to practicing law, she worked in engineering at both Ford and NASA.

  • Jessica Robinson – President and Executive Director, Michigan Mobility Institute (US)

Jessica Robinson is President and Executive Director of the Michigan Mobility Institute where she works to accelerate the development of talent for the growing mobility industry. The Institute is the first initiative of the Detroit Mobility Lab which she co-founded to focus on building the mobility talent infrastructure necessary to shape the sector’s future within the City of Detroit. She has more than 10 years of operating experience with mobility businesses at Zipcar and Ford Smart Mobility and a background in technology and innovation launching startup accelerator programs at Techstars with industry-leading corporate partners.

Global Perspectives on Law, Policy, and Mobility Innovation

Co-sponsored by the University of South Carolina School of Law.

 February 7th, 2020

9:00 AM – 5:30 PM

Room 1225, Jeffries Hall, University of Michigan Law School 

The goal of the 2020 Law and Mobility conference is to bring together a diverse selection of international transportation experts from government, industry, and civil society to discuss how communities and nations across the globe are reacting to new mobility technologies like drones, automated vehicles, and micro-mobility platforms. Within the United States the discussion around new mobility technology has been focused on domestic developments, with some discussion of developments in nations and regions that have deep connections to the American transportation system – as dictated by geography (Canada) or economics (the EU, Japan, South Korea, and Japan, among others). This conference is intended to expand that discussion to a wider set of nations and regions, to gain new perspectives on both the promise and peril of these emerging technologies.

Global Perspectives on Law, Policy, and Mobility Innovation is presented by the University of Michigan Law School’s Law and Mobility Program, and co-sponsored by the University of South Carolina School of Law.

Expert Participants will include:

  • Silvia Stuchi Cruz – Founder, CorridaAmiga (Brazil)
  • Dr. Rohit Baluja – Chairman, Institute of Road Traffic Education (India)
  • He Shanshan – Partner, Anli Partners (China)
  • Luiz Otávio Maciel – Miranda Advisor, Traffic Department of State of Pará (Brazil)
  • Pramanand Gopaldu – Lead Engineer, Traffic Management and Road Safety Unit (Mauritius)
  • Phil Monture – (Six Nations of the Grand River)
  • Raymond Hess – Transportation Manager, City of Ann Arbor (US)
  • Ellen Partridge – Policy and Strategy Director at Shared-Use Mobility Center (US)
  • Daniel Arking – Counsel, Department of Law, City of Detroit (US)
  • Jeff P. Michael, EdD – Distinguished Scholar and Leon S. Robertson Faculty Development Chair in Injury Prevention, Health Policy and Management, Johns Hopkins University (US)
  • Emily Frascaroli – Managing Counsel, Product Litigation Group, Ford Motor Company (US)
  • Jessica Robinson – President and Executive Director, Michigan Mobility Institute (US)

Further Information on Expert Participants is Available Here

Schedule of Events

Morning Sessions


(Available via livestream)

  • 9:00 am – 9:05 am
Welcome and Introduction

Profs. Daniel Crane and Bryant Walker Smith


  • 9:05 am – 10:15 am
Expert Participant Presentations 

Expert participants will make short presentations on their work and the transportation issues faced by their communities and nations.

Presenters:


  • 10:30 am – 12:00 pm
Rural and Inter-City Transportation

Emily Frascaroli, Moderator  

Expert participants will discuss the transportation challenges facing rural communities, the demands of moving people and goods across nations and regions as a whole, and how emerging transportation technologies can meet those challenges.

Each expert will briefly present their views on these issues, followed by open discussion with other speakers and questions from the audience.

Expert Participants:

Pramanand Gopaldu, Lead Engineer, Traffic Management and Road Safety Unit (Mauritius)

Luiz Otávio Maciel Miranda, Advisor, Traffic Department of State of Pará (Brazil)

Phil Monture, (Six Nations of the Grand River)

Lunch and Expert Participant Presentations

(Available via livestream)

  • 12:00 pm – 1:45 pm 

All guests will enjoy lunch while some of our expert participants make short presentations on their work and the transportation issues faced by their communities and nations.

Presenters: 

Afternoon Sessions

(Available via livestream)

  • 1:45 pm – 3:15 pm
Urban Transportation

Ellen Partridge, Moderator  

Expert participants will discuss the transportation challenges facing urban areas, and how emerging transportation technologies can meet those challenges. 

Each expert will briefly present their views on these issues, followed by open discussion with other speakers and questions from the audience.

Expert Participants:

Daniel Arking, Counsel, Department of Law, City of Detroit (US)

Silvia Stuchi Cruz, Founder, CorridaAmiga (Brazil)

Raymond Hess, Transportation Manager, City of Ann Arbor (US)


  • 3:30 pm – 5:00 pm
Transportation Regulation, Policy, and Planning 

Bryant Walker Smith, Moderator

Expert participants will discuss how governments and communities approach new transportation technology, and the relationship between law, policy, and planning in transportation systems. 

Each expert will briefly present their views on these issues, followed by open discussion with other speakers and questions from the audience.

Expert Participants:

Dr. Rohit Baluja, Chairman, Institute of Road Traffic Education (India)

Jeff P. Michael, EdD, Distinguished Scholar and Leon S. Robertson Faculty Development Chair in Injury Prevention, Health Policy and Management, Johns Hopkins University (US)

Jessica Robinson, President and Executive Director, Michigan Mobility Institute (US)


  • 5:00 pm – 5:30 pm

Summary and Closing

Ian Williams, Moderator

Expert participants and attendees will close out the day by taking part in wide discussion of all of the day’s panels.

    

A write-up of the afternoon sessions is now available here!

March 15, 2019 – 10:00 AM – 5:30 PM

Room 1225, Jeffries Hall, University of Michigan Law School 

In the case of automated driving, how and to whom should the rules of the road apply? This deep-dive conference brings together experts from government, industry, civil society, and academia to answer these questions through focused and robust discussion.

To ensure that discussions are accessible to all participants, the day will begin with an introduction to the legal and technical aspects of automated driving. It will then continue with a more general discussion of what it means to follow the law. After a lunch keynote by Rep. Debbie Dingell, expert panels will consider how traffic law should apply to automated driving and the legal person (if any) who should be responsible for traffic law violations. The day will conclude with audience discussion and a reception for all attendees.

(Re)Writing the Rules of the Road is presented by the University of Michigan Law School’s Law and Mobility Program, and co-sponsored by the University of South Carolina School of Law.

Schedule of Events

Morning Sessions 

  • 10:00 am – 10:45 am

Connected and Automated Vehicles – A Technical and Legal Primer

Prof. Bryant Walker Smith

Professor Bryant Walker Smith will provide a technical and legal introduction to automated driving and connected driving with an emphasis on the key concepts, terms, and laws that will be foundational to the afternoon sessions. This session is intended for all participants, including those with complementary expertise and those who are new to automated driving. Questions are welcome. 

  • 10:45 am – 11:15 am
Drivers Licenses for Robots? State DMV Approaches to CAV Regulation

Bernard Soriano, Deputy Director for the Califorina DMV and James Fackler, Assistant Administrator for the Customer Services Administration in the Michigan Secretary of State’s Office, discuss their respective state’s approaches to regulating connected and autonomous vehicles.

  • 11:15 am – 12:00 pm
Just What Is the Law? How Does Legal Theory Apply to Automated Vehicles and Other Autonomous Technologies?

Prof. Scott Hershovitz    

Human drivers regularly violate the rules of the road. What does this say about the meaning of law? Professor Scott Hershovitz introduces legal theory and relates it to automated driving and autonomy more generally.                  

Keynote & Lunch

  • 12:00 pm – 12:30 pm
Lunch

Free for all registered attendees!

  • 12:30 pm-1:30 pm

Keynote – Rep. Debbie Dingell

Rep. Dingell shares her insights from both national and local perspectives.  

Afternoon Sessions

(Chatham House Rule)

  • 1:30 pm – 3:00 pm
Crossing the Double Yellow Line: Should Automated Vehicles Always Follow the Rules of the Road as Written?

Should automated vehicles be designed to strictly follow the rules of the road? How should these vehicles reconcile conflicts between those rules? Are there meaningful differences among exceeding the posted speed limit to keep up with the flow of traffic, crossing a double yellow line to give more room to a bicyclist, and driving through a stop sign at the direction of a police officer? If flexibility and discretion are appropriate, how can they be achieved in law?

A panel of experts will each briefly present their views on these questions, followed by open discussion with other speakers and questions from the audience.

Featured Speakers:

Justice David F. Viviano, Michigan Supreme Court

Emily Frascaroli, Counsel, Ford Motor Company

Jessica Uguccioni, Lead Lawyer, Automated Vehicles Review, Law Commission of England and Wales

  • 3:15 pm – 4:45 pm
Who Gets the Ticket? Who or What is the Legal Driver, and How Should Law Be Enforced Against Them?

Who or what should decide whether an automated vehicle should violate a traffic law? And who or what should be responsible for that violation? Are there meaningful differences among laws about driving behavior, laws about vehicle maintenance, and laws and post-crash responsibilities? How should these laws be enforced? What are the respective roles for local, state, and national authorities?

A panel of experts will each briefly present their views on these questions, followed by open discussion with other speakers and questions from the audience.

Featured Speakers:

Thomas J. Buiteweg, Partner, Hudson Cook, LLP

Kelsey Brunette Fiedler, Ideation Analyst in Mobility Domain

Karlyn D. Stanley, Senior Policy Analyst, RAND Corporation

Daniel Hinkle, State Affairs Counsel, American Association for Justice

  • 4:45 pm – 5:30 pm 
 Summary and General Discussion                                     

Participants and attendees close out the day by taking part in wide discussion of all of the day’s panels.

By Wesley D. Hurst and Leslie J. Pujo*

Cite as: Wesley D. Hurst & Leslie Pujo, Vehicle Rental Laws: Road Blocks to Evolving Mobility Models?, 2019 J. L. & Mob. 73.

I.          Introduction

The laws and regulations governing mobility are inconsistent and antiquated and should be modernized to encourage innovation as we prepare for an autonomous car future. The National Highway Traffic Safety Administration (“NHTSA”) has concluded that Autonomous Vehicles, or Highly Automated Vehicles (“HAVs”) may “prove to be the greatest personal transportation revolution since the popularization of the personal automobile nearly a century ago.” 61 61. Federal Automated Vehicles Policy, NHTSA 5 (2016), https://www.transportation.gov/sites/dot.gov/files/docs/AV%20policy%20guidance%20PDF.pdf. × Preparation for a HAV world is underway as the mobility industry evolves and transforms itself at a remarkable pace. New mobility platforms are becoming more convenient, more automated and more data driven—all of which will facilitate the evolution to HAVs. However, that mobility revolution is hindered by an environment of older laws and regulations that are often incompatible with new models and platforms.

Although there are a number of different mobility models, this article will focus on carsharing, peer-to-peer platforms, vehicle subscription programs, and rental car businesses (yes, car rental is a mobility platform). All of these mobility models face a host of inconsistent legal, regulatory and liability issues, which create operational challenges that can stifle innovation. For example, incumbent car rental, a mobility platform that has been in place for over 100 years, is regulated by various state and local laws that address everything from driver’s license inspections to use of telematics systems. Although physical inspection of a customer’s driver’s license at the time of rental is commonplace and expected in a traditional, face-to-face transaction, complying with the driver’s license inspection for a free-floating carsharing or other remote access mobility model becomes more problematic.

Part B of this article will review current federal and state vehicle rental laws and regulations that may apply to incumbent rental car companies and other mobility models around the country, including federal laws preempting rental company vicarious liability and requiring the grounding of vehicles with open safety recalls, as well as state laws regulating GPS tracking, negligent entrustment, and toll service fees. Part C poses a series of hypotheticals to illustrate the challenges that the existing patchwork of laws creates for the mobility industry. 62 62. Note: This article focuses on existing laws applicable to short-term rentals of vehicles, rather than long-term leases (including the federal Consumer Leasing regulations, known as “Regulation M,” which are set forth in 12 C.F.R., Part 213). For a more detailed discussion of long-term vehicle leasing laws, see Thomas B. Hudson and Daniel J. Laudicina, The Consumer Leasing Act and Regulation M, in F&I Legal Desk Book (6th edition 2014). × For instance, whether a mobility operator can utilize GPS or telematics to monitor the location of a vehicle is subject to inconsistent state laws (permitted in Texas, but not California, for example). And vehicle subscription programs are currently prohibited in Indiana, but permitted in most other states. Similarly, peer-to-peer car rental programs currently are prohibited in New York, but permitted in most other states. Finally, Part D of the article will offer some suggested uniform rules for the mobility industry.

First, however, we offer the following working definitions for this article:

  • Carsharing” – a membership-based service that provides car access without ownership. Carsharing is mobility on demand, where members pay only for the time and/or distance they drive. 63 63. About the CSA, Carsharing Ass’n., https://carsharing.org/about/ (last visited May 7, 2019). ×
  • Peer-to-peer Carsharing” or “Rentals” – the sharing of privately-owned vehicles in which companies, typically for a percentage of the rental charge, broker transactions among car owners and renters by providing the organizational resources needed to make the exchange possible (i.e., online platform, customer support, driver and motor vehicle safety certification, auto insurance and technology). 64 64. Car Sharing State Laws and Legislation, Nat’l Conf. of St. Legislatures (Feb. 16, 2017), http://www.ncsl.org/research/transportation/car-sharing-state-laws-and-legislation.aspx. Since most personal auto policies do not cover commercial use of personal vehicles, if the peer-to-peer platform does not provide liability and physical damage coverage, there likely will be no coverage if the vehicle is involved in an accident during the rental period. As noted above, peer-to-peer carsharing platforms currently do not operate in New York, based, in part, on the New York Department of Insurance’s findings that a peer-to-peer platform operator’s insurance practices (including sale of group liability coverage to vehicle owners and renters) constituted unlicensed insurance producing. See RelayRides, Inc. Consent Order (N.Y. Dep’t of Fin. Serv., 2014). Although a detailed discussion of insurance-related issues is beyond the scope of this article, the Relay Rides experience in New York illustrates the need for the insurance industry and insurance laws to evolve to accommodate new mobility models. See Part B.2.d. for a discussion of legislative approaches that several states have taken to address the insurance issues implicated by the peer-to-peer model (including a 2019 New York bill). ×
  • Subscriptions” – a service that, for a recurring fee and for a limited period of time, allows a participating person exclusive use of a motor vehicle owned by an entity that controls or contracts with the subscription service. 65 65. See Ind. Code § 9-32-11-20(e) (2018). The prohibition on vehicle subscription services in Indiana originally expired on May 1, 2019, but was recently extended for another year through May 1, 2020. The Indiana definition also provides that “[Subscription] does not include leases, short term motor vehicle rentals, or services that allow short terms sharing of a motor vehicle.” A bill pending in North Carolina uses similar language to define “vehicle subscription” for purposes of determining highway use tax rates. See H.B. 537 (N.C. 2019). As further discussed in Part C below, it is not clear whether other states would take the same approach and classify a subscription model as distinct from rental or leasing instead of applying existing laws. × Typically, the subscriber is allowed to exchange the vehicle for a different type of vehicle with a certain amount of notice to the operator. This is a developing model with a number of variations, including whether the subscription includes insurance, maintenance, a mileage allowance, or other features and services.
  • Vehicle Rental” – a customer receives use of a vehicle in exchange for a fee or other consideration pursuant to a contract for a period of time less than 30 days. 66 66. See Cal. Civ. Code § 1939.01 (Deering 2019). Although for purposes of this article, we use a traditional 30-day period to define short-term rentals, we note that the time period for rentals varies by state (or even by statute for a particular state) with some defining a short-term rental for periods as long as 6 months or even one year. See, e.g., Md. Code Ann., Transportation § 18-101 (LexisNexis 2019) (defining “rent” as a period of 180 days or less). Compare 35 Ill. Comp. Stat. 155/2 (2019) (defining “rent” as a period of one year or less for purposes of the Illinois Automobile Renting Occupation and Use Tax), with 625 Ill. Comp. Stat. 27/10 (defining “rental company” as one that rents vehicles to the public for 30 days or less for purposes of the Illinois damage waiver law). ×
  • Mobility Operators” – any person or entity that provides access to a vehicle to another person whether by an in-person transaction, an app-based or online platform, or any other means and whether the entity providing the access is the owner, lessee, beneficial owner, or bailee of the vehicle or merely facilitates the transaction.

II.          Existing Laws: Lack of Uniformity and Certainty

As noted above, a patchwork of federal, state (and in some cases city or county) laws regulate short-term car rentals (in addition to generally applicable laws affecting all businesses, such as privacy and data security laws, 67 67. In addition to general privacy and data security concerns applicable to all businesses, the advent of HAVs and connected vehicles may trigger additional privacy and data security issues for mobility operators. For example, issues surrounding the control, access, and use of vehicle-generated data is still unsettled and the subject of much debate. See, e.g. Ayesha Bose, Leilani Gilpin, et al., The Vehicle Act: Safety and Security for Modern Vehicles, 53 Willamette L. Rev. 137 (2017) for additional information on this topic. × the Americans with Disabilities Act (“ADA”), employment law, and zoning laws). Car rental laws have developed over time and typically address:

  1. State and local taxes and surcharges;
  2. Licensing and operational requirements, including airport concessions and permits for picking-up and dropping-off passengers;
  3. Public policy issues, such as liability insurance and safety recalls; and
  4. Consumer protection matters, like rental agreement disclosures, restrictions on the sale of collision damage waivers, prohibitions on denying rentals based on age or credit card ownership, and restrictions on mandatory fees. 68 68. See, e.g., Final Report and Recommendations of the National Association of Attorneys General Task Force on Car Rental Industry Advertising and Practices, 56 Antitrust & Trade Regulation Report No. 1407 (March 1989) at S-3 (“NAAG Report”). The NAAG Report includes “guidelines,” which were intended for use by states in providing guidance to car rental companies on compliance with state unfair and deceptive practice laws, Id. at S-5. ×

As is often the case with regulated industries, state and local vehicle rental laws vary considerably, which can lead to uncertainty and inefficiency. For example, a multi-state operator may need to vary product offerings and pricing, customer disclosures, and agreement forms, depending upon the state in which the rental commences. 69 69. Typically, a state law will apply to a transaction if the renter accepts delivery of the vehicle in that state, regardless of where the rental company’s physical offices are located, where the vehicle is typically parked, or where the vehicle is returned. See, e.g., 24 Va. Code Ann. § 20-100-10 (2019) (“The term [rental in this State] applies regardless of where the rental agreement is written, where the rental terminates, or where the vehicle is surrendered.”). × The uncertainty and inefficiency increases dramatically when considering whether and how existing vehicle rental laws apply to new mobility platforms and services since many of the existing laws do not address or even contemplate modern technology like self-service, keyless access to vehicles, digital agreements, or telematics fleet management.

The following paragraphs provide a brief overview of some of the existing laws.

A.         Federal Law

1. Graves Amendment

The federal Graves Amendment, 70 70. 49 U.S.C.S. § 30106 (LexisNexis 2019). × passed in 2005, preempts any portion of state law that creates vicarious liability for a vehicle rental company based solely on ownership of a vehicle. Specifically:

An owner of a motor vehicle that rents or leases the vehicle to a person . . . shall not be liable . . . by reason of being the owner of the vehicle . . . for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if– (1) the owner . . . is engaged in the trade or business of renting or leasing motor vehicles; and (2) there is no negligence or criminal wrongdoing on the part of the owner . . . 71 71. Before passage of the Graves Amendment, many car leasing and renting companies ceased activities in states with unlimited vicarious liability laws based solely on ownership, such as New York. See Graham v Dunkley, 852 N.Y.S.2d 169 (App. Div. 2008); see also Susan Lorde Martin, Commerce Clause Jurisprudence and the Graves Amendment: Implications for the Vicarious Liability of Car Leasing Companies, 18 U. FLA. J.L. & Pub. Pol’y 153, 162 (2007). ×

Determining whether the Graves Amendment applies to a particular case involves an analysis of both factual and legal issues. The factual issues include a determination of whether:

(A) the claim involves a “motor vehicle”;

(B) the individual or entity is the “owner” of the motor vehicle (which may be a titleholder, lessee, or bailee) or an affiliate of the owner;

(C) the individual or entity is “engaged in the trade or business of renting or leasing motor vehicles”; and

(D) the accident occurred during the rental period. 72 72. Johnke v. Espinal-Quiroz, No. 14-CV-6992, 2016 WL 454333 (N.D. Ill. 2016). ×

    The legal issues include:

(A) whether the owner is being sued in its capacity as owner (as opposed to the employer or other principal of another party); and

(B) whether there are allegations that the owner was negligent or criminal. 73 73. Id. ×

Perhaps not surprisingly, the Graves Amendment has been highly litigated, from early challenges to its constitutionality, 74 74. See, Rosado v. Daimlerchrysler Fin. Servs. Trust, 112 So. 3d 1165 (2013); Garcia v. Vanguard Car Rental USA, Inc., 540 F.3d 1242 (2008); Rodriguez v. Testa, 993 A.2d 955 (Conn. 2009); Vargas v. Enter. Leasing Co., 60 So. 3d 1037 (Fla. 2008). × to later assertions that it does not apply to a particular case because the vehicle’s owner was not “engaged in the business of renting or leasing,” 75 75. See e.g., Minto v. Zipcar New York, Inc., No. 15401/09 (N.Y. Sup. Ct., Queens County Mar. 17, 2010); Moreau v. Josaphat, et al., 975 N.Y.S.2d 851 (N.Y. Sup. Ct. 2013). × or that an accident did not occur during the “rental period.” 76 76. Currie V. Mansoor, 71 N.Y.S.3d 633 (App. Div. 2018); Chase v. Cote, 2017 Conn. Super. LEXIS 3533 (2017); Marble v. Faelle, 89 A.3d 830 (R.I. 2014). ×

Two New York cases are instructive to operators of newer mobility models. In Minto v. Zipcar New York, Inc. 77 77. See Minto v. Zipcar New York, Inc., No. 15401/09. × and Moreau and Duverson v. Josaphat, et al., 78 78. See Moreau, 975 N.Y.S.2d 851. × a New York court examined whether carsharing company Zipcar was “engaged in the trade or business of renting or leasing motor vehicles” for purposes of the Graves Amendment – despite the fact that it touted itself as an alternative to car rental.

In the 2010 Minto case (which the Moreau case closely followed), the court stated that Zipcar’s advertising, which contrasted the company to “‘traditional car rental cars’, d[id] not foreclose the possibility that it is nevertheless also in the rental car business, although not of a traditional sort.” 79 79. See Minto v. Zipcar New York, Inc., No. 15401/09 at 2. × The court then noted that the Graves Amendment did not define “trade or business of renting or leasing motor vehicles.” 80 80. Id. × As a result, it analyzed the “constituent terms” of “renting” and “leasing” to determine whether Zipcar was a rental company for purposes of the Graves Amendment 81 81. Id. See also Moreau, 975 N.Y.S.2d at 855-856. × and concluded that the key features of a “lease” or rental” were the “transfer of the right to possession and use of goods for a term in return for consideration.” 82 82. See Minto v. Zipcar New York, Inc., No. 15401/09 at 2-3. × With these definitions in mind, the court focused on the requirement that Zipcar members pay fees in exchange for the right to use Zipcar vehicles, which it found to be “little different from ‘traditional rental car’ companies, notwithstanding Zipcar’s marketing statements that contrast it with those companies” and held that Zipcar was covered by the Graves Amendment. 83 83. Id. at 3. × As further support of its conclusion, the Minto court noted that the Zipcar marketing “shows that the company competes with traditional car-rental companies and serves a similar consumer need.” 84 84. Minto v. Zipcar New York, Inc., No. 15401/09 at 4. ×

2. Safe Rental Car Act

The Raechel and Jacqueline Houck Safe Rental Car Act of 2015 (“Safe Rental Car Act”) 85 85. Raechel and Jacqueline Houck Safe Rental Car Act of 2015, S. 1173, 114th Cong. (2015) (codified as amended in scattered sections of 49 U.S.C.). × places limits on the rental, sale, or lease of “covered rental vehicles”. 86 86. 49 U.S.C.A. § 30120(i) (2017). × A “covered rental vehicle” is one that: (A) has a gross vehicle weight rating (“GVWR”) of 10,000 pounds or less; (B) is rented without a driver for an initial term of less than 4 months; and (C) is part of a motor vehicle fleet of 35 or more motor vehicles that are used for rental purposes by a rental company. 87 87. 49 U.S.C.A. § 30102(a)(1) (2017). × A “rental company” is any individual or company that “is engaged in the business of renting covered rental vehicles,” and “uses, for rental purposes, a motor vehicle fleet of 35 or more covered rental vehicles, on average, during the calendar year.” 88 88. 49 U.S.C.A. § 30102(a)(11) (2017). ×

Under the Safe Rental Car Act, after receiving notice by electronic or first class mail of a NHTSA-approved safety related recall, a rental car company may not rent, sell, or lease an affected vehicle in its possession at the time of notification, until the defect has been remedied. The rental car company must comply with the restrictions on rental/sale/lease “as soon as practicable,” but no later than 24 hours after the receipt of the official safety recall notice (or within 48 hours if the notice covers more than 5,000 vehicles in its fleet). 89 89. 49 U.S.C.A. § 30120(i)(1) and (3) (2017). The 24-hour/48-hour time requirement applies only to vehicles in the possession of the rental company when the safety recall is received, and does not require rental companies to locate and recover vehicles that are on rent at that time. × If the safety recall notice indicates that a remedy is not immediately available, but specifies interim actions that an owner may take to alter the vehicle and eliminate the safety risk, the rental company may continue to rent (but not sell or lease) the vehicle after taking the specified actions. 90 90. 49 U.S.C.A. § 30120(i)(3)(C) (2017). Once a permanent remedy becomes available, the rental company may not rent affected vehicles until those vehicles have been repaired. ×

Despite the federal recall legislation, several states have introduced bills for similar legislation with California passing a law in 2016 that extends the restrictions on rental, sale, and lease to fleets of any size, as well as to cars loaned by dealers while a customer’s own vehicle are being repaired or serviced. 91 91. Cal. Veh. Code § 11754 (Deering 2019). × Effective January 1, 2019, the California prohibitions on the rental, lease, sale, or loan of vehicles subject to safety recalls also apply to “personal vehicle sharing programs,” which are defined as legal entities qualified to do business in the State of California that are “engaged in the business of facilitating the sharing of private passenger vehicles for noncommercial use by individuals within the state.” 92 92. Cal. Veh. Code § 11752 (West 2019); Cal Ins. Code § 11580.24(b)(2) (West 2011). ×

B.         State Law

Several states, including California, 93 93. Cal. Civ. Code §§ 1939.01 – 1939.37 (West 2017). × Hawaii, 94 94. Haw. Rev. Stat. Ann. §437D (West 2019). × Illinois, 95 95. 625 Ill. Comp. Stat. 27 (West 2019); 625 Ill. Comp. Stat. 5/6-305 (West 2019). × Nevada, 96 96. Nev. Rev. Stat. Ann. §§ 482.295–482.3159 (West 2019). × and New York, 97 97. N.Y. Gen. Bus. Law § 396-z (McKinney 2019). × have comprehensive vehicle rental laws that regulate a variety of issues, including minimum age requirements; sales of damage waivers; limitations on amounts recoverable from renters, fees that a vehicle rental company may charge; recordkeeping practices; general licensing or permit requirements; 98 98. See, e.g., Conn. Gen. Stat. Ann. § 14-15 (West 2018); D.C. Code § 50-1505.03 (2019); Del. Code Ann. Tit. 21 § 6102 (West 2019); Haw. Rev. Stat. Ann. § 251-3 (West 2019); Minn. Stat. Ann. § 168.27 (West 2019); Nev. Rev. Stat. Ann. § 482.363 (West 2019); N.J. Stat. Ann. § 45:21-12 (West 2019); Okla. Stat. tit. 47, § 8-101 (2004); 31 R.I. Gen. Laws Ann. § 31-5-33 (West 2019); W. Va. Code Ann. § 17A-6D-1 (West 2019); Wis. Stat. Ann. § 344.51(1m) (West 2018). × imposition of short-term rental taxes and surcharges; airport concession and permit requirements; limitations on the use of telematics; deposit and credit card restrictions; required display of counter signs; and required disclosures on rental agreements (including specified language, font size/style, and placement on written agreements). California even requires rental companies to warn their customers that operation of a passenger vehicle can expose individuals to certain chemicals that are known to cause cancer and birth defects, and therefore the customers should avoid breathing exhaust and take other precautions. Other states regulate one or more of these issues, with most states varying the specific requirements. For example, approximately 21 states regulate the sale of damage waivers with states taking different approaches on several key issues, including the permissibility of selling partial or deductible waivers, customer disclosures, and the permissible bases for invalidation of a waiver. 99 99. The typical damage waiver statute requires vehicle rental companies to disclose the optional nature of the waiver on the front of the rental agreement form and/or signs at the rental counter. Some statutes also regulate the content of the waiver and its exclusions. See, e.g., Cal. Civ. Code § 1939.09 (Deering 2019). Hawaii, Illinois, Maryland, New York, and Wisconsin require the distribution of brochures summarizing the damages waiver and its terms, and rental companies selling damage waivers in Louisiana and Minnesota must file a copy of the rental agreement before using it. Haw. Rev. Stat. Ann. § 437D-10 (LexisNexis 2019); 625 Ill. Comp. Stat. Ann. 27/20 (LexisNexis 2019); La. Stat. Ann. § 22:1525 (2018); Md. Code Ann. Com. Law § 14-2101 (LexisNexis 2019); Minn. Stat. Ann. § 72A.125 (West 2019); N.Y. Gen. Bus. Law § 396-z(4) (Consol. 2019); and Wis. Stat. Ann. § 344.576 (West 2018). ×

In addition to the issues noted above, most states prohibit rental of a vehicle without first inspecting the renter’s driver’s license to confirm that it is “facially valid” and (1) comparing the signature on the license with the renter’s signature written at the time of rental; and/or (2) comparing the photo with renter. 100 100. See, e.g., Fla. Stat. Ann. § 322.38(1-2) (LexisNexis 2018); 625 Ill. Comp. Stat. Ann. 5/6-305(b) (LexisNexis 2019); Nev. Rev. Stat. Ann. § 483.610 (LexisNexis 2019); Md. Code Ann. Transp. § 18-103(a), (b) (LexisNexis 2019); Wash. Rev. Code Ann. § 46.20.220 (LexisNexis 2019); W. Va. Code Ann. § 17B-4-6 (LexisNexis 2019). × Moreover, case law from various states provide guidance on what may or may not constitute negligent entrustment (which is excluded from the Graves Amendment). Finally, some states have begun to recognize the emergence of new mobility models and have either amended existing laws or passed new legislation to address the new models.

The paragraphs below summarize typical state laws (and how they vary) on several of these issues, including use of telematics systems; tolls and other fees, negligent entrustment, and peer-to-peer car sharing programs.

2. Telematics Systems and Vehicle Technology

Many mobility operators equip their rental vehicle fleet with global positioning systems (GPS) or other telematics systems (collectively “Telematics Systems”) to track vehicles for a variety of purposes, including fleet management; locating and recovering vehicles that are not returned by the due-in date (or that have been reported missing); calculating information related to the use of the vehicle, such as mileage, location, and speed; and providing services to renters, such as roadside assistance, maintenance, and navigation. Connected cars and HAVs will provide even more data that mobility operators can use to manage their fleets and enhance the user’s experience. 101 101. See, e.g., Avis Budget Group Boosts Fleet of Connected Cars with 75,000 In-Vehicle Telematics Units From I.D. Systems, Avis Budget Group (Dec. 17, 2018), https://avisbudgetgroup.com/avis-budget-group-boosts-fleet-of-connected-cars-with-75000-in-vehicle-telematics-units-from-i-d-systems-2/. (last visited May 8, 2019). ×

At the same time, mobility operators that use Telematics Systems to impose fees related to vehicle use (e.g., fees for traveling outside a geographic area or excess speeding), may face customer complaints or even litigation. For example, rental companies have been subject to suit in the past when they used GPS to collect location or speed information about a vehicle while on rent and impose additional fees on customers who violated geographic limitations of the rental agreement or state speed limits. 102 102. See Turner v. American Car Rental 884 A.2d 7 (Ct. App. Ct. 2005); Proposed Judgement, People v. Acceleron Corp., (Cal. Super. Ct. 2004), https://oag.ca.gov/system/files/attachments/press_releases/04-129_settle.pdf. ×

Four states, including California, Connecticut, Montana, and New York, currently have laws that specifically regulate “rental company” use of Telematics Systems. Specifically:

CaliforniaCalifornia generally prohibits rental companies from using, accessing, or obtaining information about a renter’s use of a rental vehicle that was obtained from “electronic surveillance technology” (“a technological method or system used to observe, monitor, or collect information, including telematics, . . . GPS, wireless technology, or location-based technology”), including for the purpose of imposing fines or surcharges.  However, electronic surveillance technology may be used if:

(1) The rented vehicle is missing or has been stolen or abandoned;

(2) the vehicle is 72 hours past the due-in date (and the company notifies the renter and includes required disclosures in the rental agreement);

(3) the vehicle is subject to an AMBER Alert; or

(4)  in response to a specific request from law enforcement pursuant to a subpoena or search warrant. 103 103. See Cal. Civ. Code § 1939.23(a) (West 2019). ×

Rental companies that use electronic surveillance technology for any of the reasons identified above also must maintain certain records of each such use for one year from date of use. 104 104. Id. The records must include any information relevant to the activation of the GPS, including: (1) the rental agreement; (2) the return date; (3) the date and time the electronic surveillance technology was activated; and (4) if relevant, a record any communication with the renter or the police. The record must be made available to the renter upon request, along with any explanatory codes necessary to read the record. × Rental companies may also use telematics at the request of renters, including for roadside service, navigation assistance, or remote locking/unlocking – as long as the rental company does not use, access or obtain information related to the renter’s use of the vehicle beyond that which is necessary to render the requested service. 105 105. See Cal. Civ. Code § 1939.23(b) (West 2019).  In addition, rental companies may obtain, access, or use information from electronic surveillance technology for the sole purpose of determining the date and time of the start and end of the rental, total mileage, and fuel level. × Like most of the other provisions of the California Vehicle Rental law, customers cannot waive these requirements. 106 106. See Cal. Civ. Code § 1939.29 (West 2019). The only provisions of the California vehicle rental law that a customer may waive are those related to business rentals, rentals of 15-passenger vans, and driver’s license inspection exceptions for remote access programs. ×

ConnecticutConnecticut’s non-uniform version of UCC Article 2A, 107 107. Conn. Gen. Stat. § 42-2A-702 (2013). × (which applies to both short-term and long-term consumer and commercial leases) regulates the use of “electronic self-help,” including the use of GPS devices to track and locate leased property to repossess the goods (or render them unusable without removal, such as remotely disabling the ignition of a vehicle). Before resorting to electronic self-help, a lessor must give notice to the lessee, stating:

      • That the lessor intends to resort to electronic self-help as a remedy on or after 15 days following notice to the lessee;
      • The nature of the claimed breach which entitled the lessor to resort to electronic self-help; and
      • The name, title, address and telephone number of a person representing the lessor with whom the lessee may communicate concerning the rental agreement.

In addition, the lessee must separately agree to a term in the lease agreement that authorizes the electronic self-help. A commercial lease requires only that the authorization is included as a separate provision in the lease, which implies that a consumer lease requires the express, affirmative consent of the lessee. 108 108. Conn. Gen. Stat. § 42-2A-702(e)(2)-(3) (2013). Lessees may recover damages, including incidental and consequential damages, for wrongful use of electronic self-help (even if the lease agreement excludes their recovery). Conn. Gen. Stat. § 42a-2A-702(e)(4). In addition, a lessor may not exercise electronic self-help if doing so would result in substantial injury or harm to the public health or safety or “grave harm” to third parties not involved in the dispute – even if the lessor otherwise complies with the statute. Conn. Gen. Stat. § 42a-2A-702(e)(5). ×

Montana Montana requires a “rental vehicle entity” providing a rental vehicle equipped with a GPS or satellite navigation system to disclose in the rental agreement (or written addendum) the presence and purpose of the system. 109 109. See Mont. Code Ann. 61-12-801(1)(a) (2019). For purposes of the Montana law, a “rental vehicle entity” is a business entity that provides the following vehicle to the public under a rental agreement for a fee: light vehicles, motor-driven cycles, quadricycles, or off-highway vehicles. Mont. Code Ann. 61-12-801(2)(b)-(c) (2019). A “rental agreement” is a written agreement for the rental of a rental vehicle for a period of 90 days or less. Mont. Code Ann. 61-12-801(2)(a) (2019). × If the GPS or satellite navigation system is used only to track lost or stolen vehicles, disclosure is not required.

New York – New York prohibits a “rental vehicle company” from using information from “any” global positioning system technology to determine or impose fees, charges, or penalties on an authorized driver’s use of the rental vehicle. 110 110. N.Y. Gen. Bus. Law 396-z(13-a). New York defines a “rental vehicle company” as “any person or organization . . . in the business of providing rental vehicles to the public from locations in [New York]. NY Gen. Bus. Law 396-z(1)(c). × The limitation on use of GPS, however, does not apply to the rental company’s right to recover a vehicle that is lost, misplaced, or stolen.

More recently, vehicle infotainment systems, which may include Telematics Systems like GPS, have come under scrutiny. In a putative class action filed against Avis Budget Group in December 2018, the plaintiff asserted that:

(a) a customer’s personal information may be collected and stored automatically by a vehicle each time the customer pairs his or her personal mobile device to the vehicle infotainment system to access navigation, music streaming, voice dialing/messaging, or other services; and

(b) failure to delete the customer data after each rental violated customers’ right to privacy under the California constitution, as well as the California rental law electronic surveillance technology provisions.

As of the date of this article, the defendant had removed the case to federal court and filed a motion to compel arbitration based on the terms and conditions of the rental agreement. 111 111. See Complaint, Kramer v. Avis Budget Group, Inc., Case No. 37-2018-00067024-CU-BT-CTL (Ca. Super. Ct., San Diego County 12/31/2018). The federal case number is 3:19cv421 (S.D. Cal.). Similar claims have been filed against other companies in California and all were initially removed to federal court, however, one of the cases has been remanded to state court. ×

2. Tolls and Other Fees

Several states, including California, Nevada, and New York, limit the types and even the amounts of fees that rental companies can charge. For example, California prohibits additional driver fees, and Nevada and New York cap those fees. In other states, a fee that appears to be excessive or punitive may be unenforceable. Generally, a fee is more likely to be enforced if it is fully disclosed, and the customer can avoid paying it by either not selecting a particular product or service (such as supplemental liability insurance or an additional driver) or not engaging in a particular behavior (such as returning the car late or with an empty gas tank). 112 112. See, e.g., Blay v. Zipcar, Inc., 716 F. Supp. 2d (D. Mass. 2010); Reed v. Zipcar, Inc., 883 F. Supp. 2d 329 (D. Mass. 2012). Cf. Bayol v. Zipcar, Inc., 78 F.Supp.3d 1252 (N.D. Cal. 2015). ×

Although disgruntled customers may complain about any fee that they believe is excessive or “hidden,” over the past several years, toll program charges have been among the most disputed in the car rental industry. Indeed, several class action claims have been filed against rental companies alleging inadequate disclosure of toll payment terms, failure to disclose use of third parties, unauthorized charges to the customer’s credit card, breach of contract, and similar claims. 113 113. See Doherty and Simonson v. Hertz, No 10-359 (NLH/KMW) 2014 WL 2916494 (D.N.J. Jun. 25, 2014) (approving over $11 million settlement of class action case based on assertions that inadequate disclosure of a rental company’s toll program violated consumer protection laws and breached the rental agreement); see also Mendez v. Avis Budget Group, Inc., No. 11-6537(JLL), 2012 WL 1224708 (D. N.J. Apr. 10, 2012); Readick v. Avis Budget Group, Inc., No. 12 Civ. 3988(PGG), 2013 WL 3388225 (S.D. N.Y. Jul. 3, 2013); Sallee v. Dollar Thrifty Automotive Group, Inc., et al., 2015 WL 1281518 (N.D. Okla. Mar. 20, 2015); Maor v. Dollar Thrifty Automotive Group, Inc., 303 F.Supp.3d 1320 (S.D. Fla. 2017). × State and local attorneys general have also investigated or filed civil claims against rental companies based on similar allegations. 114 114. See infra, note 55. ×

The increase in customer complaints and litigation likely stems from innovations in both toll collection methods and rental car toll payment processing (both of which seem likely to become an integral part of the connected car/HAV ecosystem). For example, an increasing number of toll roads and bridges are all-electronic. At the same time, many rental companies have introduced optional toll service products that permit renters to use electronic toll roads and lanes during the rental, some of which are provided by third parties. Often, a renter who declines to purchase the toll service at the time of rental will be subject to higher fees if he or she incurs toll charges by driving on an all-electronic road or lane during the rental.

The typical complaint focuses on alleged lack of or inadequate disclosure of the toll payment-processing program. For example, in recent settlement agreements with the Florida Attorney General, Avis Budget Group, Inc., and Dollar Thrifty Automotive Group, Inc. both agreed to disclose that Florida has cashless tolls, along with details about the rental company’s toll service options, and how the toll service charges can be avoided (such as by paying in cash, programming a GPS to avoid toll roads, contacting local authorities for other payment options, or using a personal transponder that is accepted on the toll road). 115 115. In February 2019, Hertz settled a case with the City Attorney of San Francisco for $3.65 million. The case alleged that the Hertz toll fee program as applied to the Golden Gate Bridge (an all-electronic toll road) failed to adequately disclose the fees or to provide customers the ability to opt-out. See Julia Cheever, Hertz Reaches $3.65 Million Settlement with SF over Golden Gate Bridge Tolls, San Francisco Examiner (Feb. 19, 2019), http://www.sfexaminer.com/hertz-reaches-3-65-m-settlement-sf-golden-gate-bridge-toll-fees/. See also Office of the Att’y Gen. of Fla.v. Dollar Thrifty Automotive Group, Inc., No. 16-2018-CV-005938 (Fla. Cir. Ct Jan. 7, 2019), https://myfloridalegal.com/webfiles.nsf/WF/TDGT-B8NT5W/$file/Final+Signed+DT AG+Settlement+Agreement+1+11+19.pdf.; In re Investigative Subpoena Duces Tecum to Avis Budget Group, Inc. and Payless Car Rental System, Inc., No 2017 CA 000122 (Fla. Cir. Ct. Jul. 7, 2017), http://myfloridalegal.com/webfiles.nsf/WF/JMAR-AP6LZQ/ $file/Settlement+Agreement+Avis.pdf. ×

Finally, state legislatures are taking notice of the tolling issues with several states proposing new legislation to regulate rental company toll programs and fees. As of January 1, 2019, Illinois became the first state to directly regulate toll programs by establishing maximum daily fees for toll programs if the rental company fails to notify the customer of the option to use a transponder or other device before or at the beginning of the rental. 116 116. See 625 Ill. Comp. Stat. 5/6-305. ×

3. Negligent Entrustment.

As noted above, the federal Graves Amendment protects “rental” or “leasing” companies from vicarious liability for their customers’ accidents based solely on ownership of the vehicle; however, the rental or leasing company is still liable for its own negligence or criminal wrongdoing. As a result, one common challenge to a rental or leasing company’s assertion of the Graves Amendment as an affirmative defense is a claim that the rental or leasing company somehow negligently entrusted the vehicle to the customer.

A vehicle owner may be liable for negligent entrustment if: (1) it provides a vehicle to a person it knows, or should know, is incompetent or unfit to drive; (2) the driver is in an accident or otherwise causes injury; and (3) that injury is caused by that person’s incompetence. 117 117. See Osborn v. Hertz Corp., 205 Cal.App.3d 703, 708-709 (1989). × To be found liable for negligent entrustment in the vehicle renting or leasing context, the rental or leasing company generally must have some special knowledge concerning a characteristic or condition peculiar to the renter that renders that person’s use of the vehicle unreasonably dangerous. Plaintiffs’ counsel typically allege that negligent entrustment is at issue where the driver appears to be intoxicated at the time of the rental or has a known substance abuse problem; where a renter is known by the rental company and its agents to be a reckless driver; or  where the rental company has reason to know that the renter may cause injury to others.

On the other hand, courts around the country have found that the following circumstances did not constitute negligent entrustment:

(1) failure to research the renter’s driving record; 118 118. See Flores v. Enterprise Rent-A-Car Co., 116 Cal. Rptr. 3d 71, 78 (2010). ×

(2) failure to recognize the signs of habitual drug use (when renter was not under the influence at the time of rental); 119 119. See Weber v Budget Truck Rental, 254 P.3d 196 (Wash. Ct. App. 2011). ×

(3) renting to an individual whose license had been suspended, but who had not yet received notification of the suspension; 120 120. See Young v. U-Haul, 11 A.3d 247 (D.C. Cir. 2011). ×

(4) failure to administer a driving test or to ensure that the driver is capable of actually operating the vehicle; 121 121. See Reph v. Hubbard, No. 07-7119, 2009 WL 659910 at *3 (E.D. La. 2009). ×

(5) renting to an individual who does not speak English fluently; (6) renting to an individual with an arm splint who did not indicate that the splint would interfere with his ability to drive; 122 122. See Mendonca v. Winckler and Corpat, Inc., No 1-5007-JLV, 2014 WL 1028392 (D.S.D. 2014). ×  and

 (7) renting to a former customer who previously reported an accident in a rental car and also allegedly returned a car with illegal drugs left behind. 123 123. See Maisonette v. Gromiler, No. FSTCV176031477S, 2018 WL 3203887 (Conn. Super. Ct. 2018). ×

4. State Laws Addressing New Mobility Platforms

More recently, some states have begun to recognize the emergence of new mobility models and have amended existing laws or passed new laws to address some of the issues. For example:

  • In 2011, California amended its insurance code to include a “personal vehicle sharing” statute, which regulates insurance aspects of “personal vehicle sharing programs” that facilitate sharing of private passenger vehicles (i.e., vehicles that are insured under personal automobile policies insuring a single individual or individuals residing in the same household) for non-commercial purposes, as long as the annual revenue received by the vehicle’s owners from the personal vehicle sharing does not exceed the annual expenses of owning and operating the vehicle (including the costs associated with personal vehicle sharing). 124 124. See Cal. Ins. Code 11580.24 (West 2018). Oregon and Washington have similar laws. ×
  • In 2012, California amended its driver’s license inspection statute to exempt membership programs permitting remote, keyless access to vehicles from driver’s license inspection requirements. 125 125. Cal. Civ. Code § 1939.37 (Deering 2019). × As of the date of this article, a similar draft bill is pending in Massachusetts. 126 126. H.D. 4139 (Mass. 2019). A similar bill came into effect in Florida on July 1, 2019. See Fla. Stat. Ann. § 322.38 (West 2019). ×
  • In 2015, Florida and Hawaii amended their laws to impose modified car rental surcharges on “carsharing organizations” (i.e., membership programs providing self-service access to vehicles on an hourly or other short-term basis). 127 127. Fla Stat. Ann. § 212.0606 (LexisNexis 2019); Haw. Rev. Stat. Ann. § 251 (LexisNexis 2019). ×
  • Maryland passed the first comprehensive “Peer-to-Peer Car Sharing Program” law in 2018. The Maryland law defines a “peer-to-peer car sharing program” as, “a platform that is in the business of connecting vehicle owners with drivers to enable the sharingof motor vehicles for financial consideration” 128 128. Md. Code Ann., Ins. § 19-520(a)(9) (LexisNexis 2019). Illinois also passed a peer-to-peer car sharing/rental law in 2018, but that law was vetoed by then-Governor Rauner. Michael J. Bologna, Illinois Governor Pumps the Brakes on Car-Sharing Taxes, Bloomberg; Daily Tax Report: State (August 31, 2018), https://www.bna.com/illinois-governor-pumps-n73014482161/ (last visited May 15, 2019). × and extends a number of vehicle rental law requirements, including those related to safety recalls, 129 129. Md. Code Ann., Transp., § 18.5-109 (LexisNexis 2019). ×  collision damage waiver sales, 130 130. Md. Code Ann., Com. Law, § 14-2101 (LexisNexis 2019). ×  limited lines licensing in connection with the sale of car rental insurance, 131 131. Md. Code Ann., Ins., § 10-6A-02 (LexisNexis 2019). × airport concession agreements, 132 132. Md. Code Ann., Transp. § 18.5-106 (LexisNexis 2019). ×  and recordkeeping requirements, to peer-to-peer car sharing programs. 133 133. Md. Code Ann., Ins. § 19-520 (LexisNexis 2019). × It also exempts the Peer-to-Peer Car Sharing Program operator and the shared vehicle’s owner from vicarious liability based solely on vehicle ownership in accordance with the Graves Amendment. 134 134. Md. Code Ann., Ins. § 19-520(e) (LexisNexis 2019). ×

 As of June 2019, the following states have pending, or have passed, peer-to-peer car sharing/car rental (or personal motor vehicle sharing) legislation: Arizona, California, Colorado, Georgia, Hawaii, Indiana, Iowa, Massachusetts, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, Washington, and West Virginia. 135 135. Arizona H.B. 2559 (Ariz. 2019) and S.B. 1305 (Ariz. 2019); A.B. 1263 (Cal. 2019); S.B. 090 (Colo. 2019); H.B. 378 (Ga. 2019); H.B. 241 HD2 SD 1 (Haw. 2019) and S.B. 662 SD2 (Haw. 2019); Pub. L. No. 253 (Ind. 2019) (to be codified at Ind. Code § 9-25-6-3); H.F. 779 (Ia. 2019); H.D. 4139 (Mass. 2019); L.B. 349 (Neb. 2019); S.B. 478 (Nev. 2019); H.B. 274 (N.H. 2019); A.B. 5092 (N.J. 2019); S.B. 556 (N.M. 2019); S.B. 5995 (N.Y. 2019); H.B. 2071 (Wash. 2019); H.B. 2762 (W. Va. 2019). × The scope of the pending bills ranges from extension of rental tax obligations to peer-to peer rentals to more comprehensive schemes similar to that passed in Maryland in 2018.

III.          The Challenge of Compliance

As demonstrated in the brief survey of existing rental laws above incumbent vehicle rental companies (especially those that operate in several states) must navigate numerous and often-inconsistent federal and state laws in their day-to-day operations. In addition to the challenges created by inconsistencies in the substantive requirements of the laws, not all of the laws use the same definition of “vehicle rental company” (which may vary depending upon the length of the transaction and the type of vehicle rented), so it is possible for an entity or transaction to be considered a “rental” in some, but not all, states or for some, but not all, purposes. 136 136. See Minto v. Zipcar New York, Inc., No. 15401/09 (N.Y. Super. Ct., Queens County Mar. 17, 2010). ×

In recent years, the challenge of compliance with existing laws – most of which did not contemplate anything other than a face-to-face handover of vehicle and keys — has increased as new entrants and incumbent operators attempt to innovate and take advantage of new technology to improve operations and customer experience. For example, use of kiosks, keyless access and GPS fleet management are all innovations that can improve the customer experience, which existing vehicle rental laws fail to facilitate. Enter the newer mobility operators, and things become even more interesting, with a close analysis of the definition of “rental company,” “rental vehicle,” and other key terms becoming even more important. To provide some context, consider a few hypotheticals:

Hypothetical 1 A 26-year old driver with a facially valid, but recently suspended driver’s license, rents a car in Arizona and is involved in an accident injuring a third party. Under Arizona law and indeed the law of all states, the rental car operator meets its statutory obligations by inspecting the driver’s license and confirming that it is facially valid. There is no duty to conduct any further investigation into the status of the driver’s license or the driving record of the prospective renter. Under this simple fact pattern, the rental car company has no liability to the injured third party for the negligence of the renter (beyond any state mandated minimum financial responsibility limit). Should the outcome be the same for a carsharing operation where the user accesses the vehicle through an app without any direct in-person contact with personnel of the operator? What about an owner of small fleet of cars who “rents” his vehicles through a peer-to-peer rental platform? How about a subscription program where an employee delivers a vehicle to a “lessee” or “renter” who has elected to switch the model of car being used?

Hypothetical 2 A California carshare member has had possession of a vehicle for three days and the operator receives notice that the member’s credit card is expired. The member has not responded to inquiries from the operator. If the carsharing transaction is considered to be a rental, as noted above, in California and a few other states, the mobility operator is precluded by statute from utilizing the vehicle’s GPS to locate the vehicle (at least until certain time periods have expired). Should that same limitation apply to the carshare operator? What if the purpose was to make sure that vehicles are properly distributed around a region so that it can serve its members’ anticipated demands? What about the renter of a peer-to-peer vehicle who is late with the car – can either the owner of the car or the peer-to-peer platform assist in locating the car via the vehicle’s GPS system? Can the operator of a subscription program utilize GPS to track the location of vehicles?

Hypothetical 3 A 30-year old renter with a valid license rents a vehicle through a peer-to-peer platform and two days later causes an accident resulting in substantial property damage and injuries. Pursuant to the federal Graves Amendment, if a peer-to-peer rental is characterized as a car rental transaction, the vehicle owner might argue there is no vicarious liability for the actions of the driver (assuming there was no negligence in how the transaction was handled). It is possible the arguments would vary if the owner of the vehicle operated a small fleet of cars, which it placed on a peer-to-peer platform. A few courts have concluded that the Graves Amendment protection extends to carshare operations. 137 137. See id. × Should that protection extend to the individual or small fleet owner that utilizes a peer-to-peer platform? Is there any basis to extend the Graves Amendment protection to the platform operator given that it typically does not own the vehicles?

Currently, the answers to many of the questions raised above are unclear with scant guidance from state legislatures or courts. As a result, a mobility operator generally must look to the definition of “rental company” to determine whether its model is or may be covered by a particular law. And that inquiry may lead an incumbent car rental operator to argue that it should no longer be subject to the outdated vehicle rental laws and regulations either.

IV.          Proposal

There is an ongoing debate in the mobility industry as to the extent that some models need to comply with existing laws and regulations related to the rental car industry. In particular, some peer-to-peer companies resist the application of those rules to their operations and argue that they are merely a technology company providing a platform to connect drivers with cars, and therefore are not subject to taxes, licensing requirements, or consumer protection laws governing incumbent rental companies. 138 138. See Turo, Inc. v. City of Los Angeles, 2019 U.S. Dist. LEXIS 6532 (C.D. Cal. 2019) (dismissing as unripe a peer-to-peer platform provider’s claim that it is immune from liability for state law violations under Section 230 of the Communications Decency Act and denying motions to dismiss claims that the City of Los Angeles misclassified the peer-to-peer platform provider as a rental company). × However, others urge that if all mobility operators are offering essentially the same services (use of a non-owned vehicle), then it seems more accurate to consider all mobility operators in the same business – mobility. As the New York Supreme Court noted in the Zipcar cases discussed in Part B, the services provided by a carsharing company (Zipcar) served a similar consumer need and were “little different from ‘traditional rental car’ companies, notwithstanding marketing statements that contrast it with those companies.” 139 139. See Minto v. Zipcar New York, Inc., No. 15401/09; see also Orly Lobel, “The Law of the Platform,” 101 Minn. L. Rev. 87, 112 (November 2016). ×

Setting aside those differences, there is some value to the mobility industry as a whole in consistent laws and regulations on some issues across the country and, of course, in protecting the safety and privacy of users. What follows are a few recommendations that could form the basis for a set of uniform laws applicable to the mobility industry. 140 140. The authors are unaware of any existing model laws for car rental or the broader mobility industry. Although the National Association of Attorneys General issued the NAAG Report on car rental practices and “guidelines” in 1989, those Guidelines were not intended to serve as model and uniform law, but rather guidance on compliance with state unfair and deceptive trade practice laws. See supra note 8. In addition, the NAAG Guidelines are now 30 years’ old and somewhat outdated in light of the changes in technology and the evolution in the mobility industry discussed in this article. ×

A.         Standardized Terms and Definitions 

Mobility operators, consumers, and regulators would benefit if federal and state laws used more consistent definitions for key terms and phrases. The definitions of the different platforms at the beginning of this article could be a starting point (which we repeat here without citations for ease of reference):

  • “Carsharing” – a membership-based service that provides car access without ownership. Carsharing is mobility on demand, where members pay only for the time and/or distance they drive.
  • “Peer-to-Peer Carsharing or Rentals” – the sharing of privately-owned vehicles in which companies, typically for a percentage of the rental charge, broker transactions among car owners and renters by providing the organizational resources needed to make the exchange possible (i.e., online platform, customer support, driver and motor vehicle safety certification, auto insurance and technology).
  • “Subscriptions” – a service that, for a recurring fee allows a participating person exclusive use of a motor vehicle owned by an entity that controls or contracts with the subscription service. Typically, the subscriber is allowed to exchange the vehicle for a different type of vehicle with a certain amount of notice to the operator. The term of the subscription can vary, but should be subject to a periodic renewal by the subscriber (user).
  • “Vehicle Rental” – a customer receives use of a vehicle in exchange for a fee or other consideration pursuant to a contract for an initial period of time less than 30 days.
  • “Mobility Operators” – any person or entity that provides access to a vehicle to another person whether by an in-person transaction, an app-based or online platform, or any other means and whether the entity providing the access is the owner, lessee, beneficial owner, or bailee of the vehicle or merely facilitates the transaction.

In addition, standard definitions for the terms, “rental” and “rental company” would provide additional clarity for all mobility operators, and to the extent feasible, the more narrow term “rental” and its derivatives should be replaced with “mobility.”

“Rental” should focus on the service provided and be distinguished from long-term leases (which are subject to additional laws and regulations, including federal Regulation M). As a starting point, “rental” could be defined as the right to use and possess a vehicle in exchange for a fee or other consideration for an initial period of less than 90 days. 141 141. Although the definition of “consumer lease” is a transaction for a period exceeding 4 months, we note that other federal laws, such as Graham-Leach-Bliley impose additional requirements on leases of at least 90 days. See 12 C.F.R. § 213.2(e)(1) (2011); 16 C.F.R. § 313.3(k)(2)(iii) (2000). ×

“Rental Company” or “Mobility Company” should be defined as “any corporation, sole proprietorship or other entity or person who is engaged in the business of facilitating vehicle rental transactions.” 142 142. See, e.g., H.B. 2762 (W. Va. 2019). × A de minimis exemption for individuals renting private vehicles through a peer-to-peer or other private vehicle program could apply (e.g., no more than X vehicles available for rent during a 12-month period). 143 143. See id. ×

A more uniform definition for “Rental Vehicle” or “Mobility Vehicle” also could produce more consistency across or even within states since some existing vehicle rental laws currently apply only to “private passenger vehicles,” while others apply more broadly to “motor vehicles.” Before proposing model language, however, we believe that regulators and industry experts need to consider several important (and somewhat thorny) issues.

For example, consider the rental of a pick-up truck to a contractor for use at a construction site. If a law applies only to rentals of “private passenger vehicles,” then the pick-up truck likely would not be subject to the law. On the other hand, if the law applies more broadly to “motor vehicles,” then the pick-up truck rental likely would be covered. The policy argument for covering our hypothetical pick-up truck rental may be weaker for consumer protection statutes, like required disclosures for sales of damage waiver or child safety seat rules. On the other hand, using a broader definition of “rental vehicle,” which would include the hypothetical pick-up truck, may better serve the general public policy goals of the Graves Amendment, the Safe Rental Act, and laws related to liability and insurance.

B.         Use of GPS and Telematics Technology

The use of this technology for locating and monitoring vehicles for a legitimate business, operational, maintenance or safety purpose should be permitted. Those states that have restricted the use of GPS tracking have done so to protect the privacy of renters. Operators in states where there is no statutory limitation often provide a full disclosure to users that vehicle location and other data may be monitored. We believe there are certain mobility models and circumstances where location and other data should be monitored – as long as there is full disclosure. For example, a free-floating carshare operator should be allowed to monitor vehicle location for the purpose of serving anticipated demand. Similarly, an operator of an EV fleet should be allowed to monitor a vehicle’s battery charge and location to ensure an adequate charge level for the next user. Finally, mobility operators should have the right to use GPS or other technology to locate vehicles that have not been returned on time or when the operator otherwise has reason to believe that the vehicle has been abandoned or stolen, or to track mileage driven or fuel used for purposes of charging associated fees (provided there is appropriate notice and full disclosure to the user). On a broader scale, uniform regulation that permits some vehicle monitoring, as long as done in a manner to protect the privacy of a user and with full disclosure, should be adopted across all mobility platforms.

C.         Vehicle Access

Provided there is an initial verification of a driver’s license, a mobility operator that either allows access to vehicles without in-person contact or does not require signing of a rental agreement at the time of rental should be subject to a provision similar to the following:

If a motor vehicle rental company or private vehicle rental program provider facilitates rentals via digital electronic, or other means that allow customers to obtain possession of a vehicle without in person contact with an agent or employee of the provider, or where the renter does not execute a rental contract at the time of rental, the provider shall be deemed to have met all obligations to physically inspect and compare a renter’s driver license pursuant to this article when such provider:

  1. At the time a renter enrolls, or any time thereafter, in a membership program, master agreement, or other means of establishing use of the provider’s services, requires verification that the renter is a licensed driver; or
  2. Prior to the renter taking possession of the rental vehicle, the provider requires documentation that verifies the renter’s identity. 144 144. Id. ×

D.         Graves Amendment    

The Graves Amendment, by its language, applies to the business of “renting or leasing” vehicles. A few state court cases have confirmed that Graves applies to carsharing. That application should be expressly adopted on a national basis and extended to all mobility models that involve a vehicle “owner’s” grant of the right to possess and use a vehicle in exchange for a fee or other consideration (including loaner vehicles).

Similarly, subscription programs which operate somewhere between incumbent car rental and vehicle leasing programs, at their core involve the short-term use of a vehicle in exchange for payment. Provided the subscription program complies with state rental car laws or applicable subscription legislation, the operation should be subject to the Graves Amendment. For that reason, we recommend that state legislatures either refine the Indiana/North Carolina definition of “subscription” to clarify that the model is a rental or lease for purposes of the Graves Amendment or simply state that subscription models are exempt from state vicarious liability laws based on vehicle ownership.

Peer-to-Peer platforms raise some issues when considering the Graves Amendment. On the one hand, an end-user is paying money to use a vehicle that belongs to someone else much like an incumbent rental car operation. On the other hand, a true “peer”-or individual- who occasionally lists his or her personal vehicle for rent when not using it may not really be in the business of renting cars. Much of the recent Peer-to-Peer legislation addresses this and related issues. Our suggestion is that Peer-to-Peer be subject to express state legislation and that such legislation impose sufficient operational, safety and economic obligations on operators, including required insurance coverage. In the absence of Peer-to-Peer legislation, an operator should have to comply with existing state rental car regulations especially if the operator somehow claims it is subject to the Graves Amendment.

E.         Americans with Disabilities Act

    Compliance with and exceptions to the ADA is complex. However, we propose that all mobility operators with fleets above a certain size must provide adaptive driving devices for selected vehicles, as long as the customer provides advance notice (which may vary depending upon the operator’s location and fleet size) and the adaptive driving devices are compatible with vehicle design and do not interfere with the vehicle’s airbag or other safety systems.

F.         Disclosure Requirements

All operators must provide sufficient disclosures to users regarding the following matters: fees, charges, damage waivers, added insurance, and vehicle technology. However, typical requirements in the existing state rental laws, including specified placement and font size for disclosures and in-person acknowledgment of receipt of those disclosures, simply do not contemplate modern technology, including digital agreements and remote access.  We propose the 2018 amendment to the New York vehicle rental law as the model for addressing required disclosures and formatting in electronic and/or master, membership agreements. That amendment provides:

(a) Notwithstanding any other provision of this section, any notice or disclosure of general applicability required to be provided, delivered, posted, or otherwise made available by a rental vehicle company pursuant to this section shall also be deemed timely and effectively made where such notice or disclosure is:

(i)       provided or delivered electronically to the renter at or before the time required provided that such renter has given his or her expressed consent to receive such notice or disclosure in such a manner; or

(ii)      included in a member or master agreement in effect at the time of rental.

(b)  . . . Notices and disclosures made electronically pursuant to this subdivision shall be exempt from any placement or stylistic display requirements, including but not limited to location, font size, typeset, or other specifically stated description; provided such disclosure is made in a clear and conspicuous manner. 145 145. N.Y. Gen. Bus Law § 396-z(16). ×

G.         Other Issues

There are, of course, other issues the industry can consider. For example, some states (New York and Michigan) have laws requiring rental car companies to make vehicles available to younger drivers, subject to certain conditions. Some uniformity on the ability of mobility operators to set minimum age requirements would reduce risk. Additionally, there are inconsistent laws across the country regarding the amount of time a rental car company must wait after a renter fails to return a car before it can notify law enforcement. Appropriate and consistent rules as to when an operator can start to recover a valuable (and mobile) asset would help promote growth in the industry.

The mobility revolution involves a number of different players with disparate and sometimes competing interests. Not all the participants will agree on all the issues, however, we offer the above suggestions to encourage discussion and to advance some level of consistency on a few points.


Wes Hurst is an attorney with a nationwide Mobility and Vehicle Use Practice. He represents rental car companies, carsharing companies, automobile manufacturers and companies pursuing new and emerging business models related to mobility and the use of vehicles. Wes is a frequent speaker and author on mobility related topics. Wes is in the Los Angeles office of Polsinelli and can be reached at whurst@polsinelli.com.

Leslie Pujo is a Partner with Plave Koch PLC in Reston, Virginia. In her Mobility and Vehicle Use Practice, Leslie regularly represents mobility operators of all types, including car rental companies, RV rental companies, automobile manufacturers and dealers, carsharing companies and other emerging models. Leslie is a frequent speaker and author on car rental and other mobility topics and can be reached at lpujo@plavekoch.com.

* The authors wish to thank Naila Parvez for her assistance

By Bryan Casey

Cite as: Bryan Casey, Title 2.0: Discrimination Law in a Data-Driven Society, 2019 J. L. & Mob. 36.

Abstract

More than a quarter century after civil rights activists pioneered America’s first ridesharing network, the connections between transportation, innovation, and discrimination are again on full display. Industry leaders such as Uber, Amazon, and Waze have garnered widespread acclaim for successfully combatting stubbornly persistent barriers to transportation. But alongside this well-deserved praise has come a new set of concerns. Indeed, a growing number of studies have uncovered troubling racial disparities in wait times, ride cancellation rates, and service availability in companies including Uber, Lyft, Task Rabbit, Grubhub, and Amazon Delivery.

Surveying the methodologies employed by these studies reveals a subtle, but vitally important, commonality. All of them measure discrimination at a statistical level, not an individual one. As a structural matter, this isn’t coincidental. As America transitions to an increasingly algorithmic society, all signs now suggest we are leaving traditional brick-and-mortar establishments behind for a new breed of data-driven ones. Discrimination, in other words, is going digital. And when it does, it will manifest itself—almost by definition—at a macroscopic scale. Why does this matter? Because not all of our civil rights laws cognize statistically-based discrimination claims. And as it so happens, Title II could be among them.

This piece discusses the implications of this doctrinal uncertainty in a world where statistically-based claims are likely to be pressed against data-driven establishments with increasing regularity. Its goals are twofold. First, it seeks to build upon adjacent scholarship by fleshing out the specific structural features of emerging business models that will make Title II’s cognizance of “disparate effect” claims so urgent. In doing so, it argues that it is not the “platform economy,” per se, that poses an existential threat to the statute but something deeper. The true threat, to borrow Lawrence Lessig’s framing, is architectural in nature. It is the algorithms underlying “platform economy businesses” that are of greatest doctrinal concern—regardless of whether such businesses operate inside the platform economy or outside it. Second, this essay joins others in calling for policy reforms focused on modernizing our civil rights canon. It argues that our transition from the “Internet Society” to the “Algorithmic Society” will demand that Title II receive a doctrinal update. If it is to remain relevant in the years and decades ahead, Title II must become Title 2.0.


Introduction

For the rational study of the law the blackletter man may be the man of the present, but the man of the future is the man of statistics.

—Oliver Wendell Holmes, Jr. 146 146. Oliver Wendell Holmes, The Path of the Law, 10 Harv. L. Rev. 457, 469 (1897). ×

The future is already here—it is just unevenly distributed.

—William Gibson 147 147. As quoted in Peering round the corner, The Economist, Oct. 11, 2001, https://www.economist.com/special-report/2001/10/11/peering-round-the-corner. ×

It took just four days after Rosa Parks’ arrest to mount a response. Jo Ann Robinson, E.D. Nixon, Ralph Abernathy, and a little-known pastor named Martin King, Jr. would head a coalition of activists boycotting Montgomery, Alabama’s public buses. 148 148. Jack M. Bloom, Class, Race, and the Civil Rights Movement 140 (Ind. U. Press ed. 1987). × Leaders announced the plan the next day, expecting something like a 60% turnout. 149 149. Id. × But to their surprise, more than 90% of the city’s black ridership joined. The total exceeded 40,000 individuals. 150 150. See History.com Editors, How the Montgomery Bus Boycott Accelerated the Civil Rights Movement, History Channel (Feb. 3, 2010), https://www.history.com/topics/black-history/montgomery-bus-boycott. ×

Sheer numbers—they quickly realized—meant that relying on taxis as their sole means of vehicular transport would be impossible. Instead, they got creative. The coalition organized an elaborate system of carpools and cabbies that managed to charge rates comparable to Montgomery’s own municipal system. 151 151. Id. × And so it was that America’s first ridesharing network was born. 152 152. More precisely, the first large-scale ridesharing network making use of automobiles. ×

Fast forward some sixty years to the present and the connections between transportation, innovation, and civil rights are again on full display. Nowadays, the networking system pioneered by Montgomery’s protestors is among the hottest tickets in tech. Newly minted startups launching “ridesharing platforms,” “carsourcing software,” “delivery sharing networks,” “bikesharing” offerings, “carpooling apps,” and “scooter sharing” schemes are a seemingly daily fixture of the news. And just as was true during the Civil Rights Movement, discrimination continues to be a hot-button issue.

Industry leaders such as Uber, Amazon, and Waze have garnered widespread acclaim for successfully combatting discriminatory barriers to transportation that stubbornly persist in modern America. 153 153. See infra Part I. × But alongside this well-deserved praise has come a new set of concerns. Indeed, a growing number of studies have uncovered troubling racial disparities in wait times, ride cancellation rates, and service availability in the likes of Uber, Lyft, Task Rabbit, Grubhub, and Amazon Delivery. 154 154. See infra Part I(A). × The weight of the evidence suggests a cautionary tale: The same technologies capable of combatting modern discrimination also appear capable of producing it.

Surveying the methodologies employed by these reports reveals a subtle, but vitally important, commonality. All of them measure discrimination at a statistical—not individual—scale. 155 155. See infra Part I(A). ×

As a structural matter, this isn’t coincidental. Uber, Amazon, and a host of other technology leaders have transformed traditional brick-and-mortar business models into data-driven ones fit for the digital age. Yet in doing so, they’ve also taken much discretion out of the hands of individual decision-makers and put it into hands of algorithms. 156 156. See infra Part II(D). × This transfer holds genuine promise of alleviating the kinds of overt prejudice familiar to Rosa Parks and her fellow activists. But is also means that when discrimination does occur, it will manifest—almost by definition—at a statistical scale.

This piece discusses the implications of this fast-approaching reality for one of our most canonical civil rights statutes, Title II of the Civil Rights Act of 1964. 157 157. Civil Rights Act of 1964, tit. II, 42 U.S.C. § 2000a (2018). × Today, a tentative consensus holds that certain of our civil rights laws recognize claims of “discriminatory effect” based in statistical evidence. But Title II is not among them. 158 158. See infra Part II(B). Major courts have recently taken up the issue tangentially, but uncertainty still reigns. × Indeed, more than a quarter century after its passage, it remains genuinely unclear whether the statute encompasses disparate effect claims at all.

This essay explores the implications of this doctrinal uncertainty in a world where statistically-based claims are likely to be pressed against data-driven companies with increasing regularity. Its goals are twofold. First, it seeks to build upon adjacent scholarship 159 159. Of particular note is a groundbreaking piece by Nancy Leong and Aaron Belzer, The New Public Accommodations: Race Discrimination in the Platform Economy, 105 Geo. L. J. 1271 (2017). × by fleshing out the specific structural features of emerging business models that will make Title II’s cognizance of disparate effect claims so urgent. In doing so, it argues that it is not the “platform economy,” per se, that poses a threat to the civil rights law but something deeper. The true threat, to borrow Lawrence Lessig’s framing, is architectural in nature. 160 160. Lawrence Lessig, The Law of the Horse: What Cyberlaw Might Teach, 113 Harv. L. Rev. 501, 509 (1999) (describing “architecture,” “norms,” “law,” and “markets” as the four primary modes of regulation). × It is the algorithms underlying emerging platform economy businesses that are of greatest doctrinal concern—regardless of whether such businesses operate inside the platform economy or outside it. 161 161. And, needless to say, there will be a great many more companies that operate outside of it. ×

Second, this essay joins other scholars in calling for policy reforms focused on modernizing our civil rights canon. 162 162. See, e.g., Leong & Belzer supra note 14; Andrew Selbst, Disparate Impact in Big Data Policing, 52 Georgia L. Rev. 109 (2017) (discussing disparate impact liability in other civil rights contexts). × It argues that our transition from the “Internet Society” to the “Algorithmic Society” will demand that Title II receive a doctrinal update. 163 163. See Jack Balkin, Free Speech in the Algorithmic Society: Big Data, Private Governance, and New School Speech Regulation, 51 U.C. Davis L. Rev. 1149, 1150 (noting that society is entering a new post-internet phase he calls the “Algorithmic Society”). × If the statute is to remain relevant in the years and decades ahead, Title II must become Title 2.0.

I.          The Rise of Data-Driven Transportation

Today, algorithms drive society. They power the apps we use to skirt traffic, the networking systems we use to dispatch mobility services, and even the on-demand delivery providers we use to avoid driving in the first place.

For most Americans, paper atlases have been shrugged. Algorithms, of one variety or another, now govern how we move. And far from being anywhere near “peak” 164 164. Gil Press, A Very Short History of Digitization, Forbes (Dec. 27, 2015), https://www.forbes.com/sites/gilpress/2015/12/27/a-very-short-history-of-digitization/#1560b2bb49ac (describing digitization technologies in terms of “peak” adoption). × levels of digitization, society’s embrace of algorithms only appears to be gaining steam. With announcements of new autonomous and connected technologies now a daily fixture of the media, all signs suggest that we’re at the beginning of a long road to algorithmic ubiquity. Data-driven transportation might rightly be described as pervasive today. But tomorrow, it is poised to become the de facto means by which people, goods, and services get from Point A to B.

Many have high hopes for this high-tech future, particularly when it comes to combatting longstanding issues of discrimination in transportation. Observers have hailed the likes of Uber and Lyft as finally allowing “African American customers [to] catch a drama-free lift from point A to point B.” 165 165. E.g., Latoya Peterson, Uber’s Convenient Racial Politics, Splinter News (Jul. 23, 2015), https://splinternews.com/ubers-convenient-racial-politics-1793849400. × They’ve championed low-cost delivery services, such as Amazon and Grubhub, as providing viable alternatives to transit for individuals with disabilities. 166 166. See, e.g., Winnie Sun, Why What Amazon Has Done For Medicaid And Low-Income Americans Matters, Forbes (Mar. 7, 2018), https://www.forbes.com/sites/winniesun/2018/03/07/why-what-amazon-has-done-for-medicaid-and-low-income-americans-matters/#7dbe2ff1ac76; Paige Wyatt, Amazon Offers Discounted Prime Membership to Medicaid Recipients, The Mighty (Mar. 9, 2018), https://themighty.com/2018/03/amazon-prime-discount-medicaid/. × And they’ve even praised navigation apps, like Waze, for bursting drivers’ “very white, very male, very middle-to-upper class” bubbles. 167 167. E.g., Mike Eynon, How Using Waze Unmasked My Privilege, Medium (Oct. 2, 2015), https://medium.com/diversify-tech/how-using-waze-unmasked-my-privilege-26 355a84fe05. × It is through algorithmic transportation, in other words, that we’re beginning to glimpse a more equitable America—with our mobility systems finally exorcised of the types of discrimination that stubbornly persist today, some fifty years after the passage of modern civil rights legislation.

A.         Out With the Old Bias, In With the New?

As with seemingly all significant technological breakthroughs, however, algorithmic transportation also gives rise to new challenges. And discrimination is no exception. Already, multiple studies have revealed the potential for racial bias to infiltrate the likes of Uber, Lyft, Grubhub, and Amazon. 168 168. See infra notes 14 – 28. See also, e.g., Jacob Thebault-Spieker et al., Towards a Geographic Understanding of the Sharing Economy: Systemic Biases in UberX and TaskRabbit, 21 ACM Transactions on Computer-Human Interaction (2017). × The National Bureau of Economic Research’s (“NBER”) groundbreaking study revealing a pattern of racial discrimination in Uber and Lyft services is one such exemplar. 169 169. Yanbo Ge, et al., Racial and Gender Discrimination in Transportation Network Companies, (2016), http://www.nber.org/papers/w22776. × After deploying test subjects on nearly 1,500 trips, researchers found that black riders 170 170. Or riders with black-sounding names. × experienced significantly higher wait times and trip cancellations than their white counterparts.

The NBER’s piece was preceded—months earlier—by a similarly provocative report from Jennifer Stark and Nicholas Diakopoulus. 171 171. See Jennifer Stark & Nicholas Diakopoulus, Uber Seems to Offer Better Service in Areas With More White People. That Raises Some Tough Questions., Wash. Post (Mar. 10, 2016), https://www.washingtonpost.com/news/wonk/wp/2016/03/10/uber-seems-to-offer-better-service-in-areas-with-more-white-people-that-raises-some-tough-questions/. × Using a month’s worth of Uber API data, the scholars found a statistical correlation between passenger wait times and neighborhood demographic makeup. The upshot? That Uber’s patented “surge pricing algorithm” resulted in disproportionately longer wait times for people of color, even after controlling for factors such as income, poverty, and population density.

Another example comes from Bloomberg, which reported in 2017 that Amazon’s expedited delivery services tended to bypass areas composed of predominantly black residents. 172 172. See David Ingold & Spencer Soper, Amazon Doesn’t Consider the Race of Its Customers. Should It?, Bloomberg (Apr. 21, 2016), https://www.bloomberg.com/graphics/2016-amazon-same-day/. × Bloomberg’s findings were subsequently buttressed by a Washington Post piece revealing that the “delivery zones” of services such as Grubhub, Door Dash, Amazon Restaurants, and Caviar appeared highly limited in low-income, minority-majority areas. 173 173. Tim Carman, D.C. has never had more food delivery options. Unless you live across the Anacostia River., Wash. Post (Apr. 2, 2018), https://www.washingtonpost.com/news/food/wp/2018/04/02/dc-has-never-had-more-food-delivery-options-unless-you-live-across-the-anacostia-river/?utm_term=.dead0dca9e8a. ×

B.         Discrimination’s Digital Architecture

While the patterns and practices uncovered by these reports vary dramatically, they share one commonality whose importance cannot be overstated. Each of them measures racial bias at a statistical—not individual—scale.

As a structural matter, this observation is in some sense unavoidable. When discrimination occurs in traditional brick-and-mortar contexts, it generally does so out in the open. It is difficult to turn someone away from Starbucks, 174 174. This example is pulled from an all-too-recent headline. See Rachel Adams, Starbucks to Close 8,000 U.S. Stores for Racial-Bias Training After Arrests, N.Y. Times (Apr. 17, 2018), https://www.nytimes.com/2018/04/17/business/starbucks-arrests-racial-bias.html. × after all, without them being made aware of the denial, even if the precise rationale is not clear.

But as the means by which Americans secure their transportation, food, and lodging goes increasingly digital, the “architecture” 175 175. See Lessig, supra note 15. × of discrimination will take on a different face. Our interactions with cab companies, public transportation providers, and delivery services will be mediated by algorithms that we neither see nor necessarily understand. And face-to-face interactions with service providers, meanwhile, will become a thing of the past.

In countless respects, this transition is cause for celebration. A society driven by algorithms is one that holds genuine hope of eliminating the types of overt discrimination that drove civil rights reforms of past eras. But in its stead, an emerging body of evidence suggests that subtler forms of discrimination may persist—ones that could challenge the doctrinal foundations on which our civil rights laws currently rest.

II.         When Blackletter Civil Rights Law Isn’t Black and White

When it comes to holding private entities that provide our transportation, food, and lodging accountable for racial discrimination, the usual suspect is Title II of the Civil Rights Act. Title II sets forth the basic guarantee that “[a]ll persons [are] entitled to the full and equal enjoyment of the goods, services, facilities, privileges, advantages, and accommodations of any place of public accommodation. . . without discrimination or segregation on the ground of race, color, religion, or national origin.” 176 176. Civil Rights Act of 1964, 42 U.S.C. § 2000a(a) (2018). × The statute defines “public accommodation” broadly as essentially any “establishment affecting interstate commerce.” 177 177. See id (with the exception of a few carve outs—private clubs being one such example). ×

Pursuing a Title II claim requires, first, establishing a prima facie case of discrimination. To do so, claimants must show they: (1) are members of a protected class; (2) were denied the full benefits of a public accommodation; and (3) were treated less favorably than others 178 178. Id (specifically, “. . . treated less favorably than others outside of the protected class” who are similarly situated). × outside of the protected class. 179 179. Having established a prima facie case, the burden of persuasion then shifts to the defendant. For simplicity’s sake, this piece strictly analyzes prima facie claims and does not delve into the complexities of burden shifting and justifying legitimate business decisions under modern antidiscrimination law. ×

A.         The Intent Requirement and the Man of Statistics

At first blush, establishing these prima facie elements using the types of evidence documented by the reports noted in Part I(A) may seem straightforward. But there’s just one tiny detail standing in the way. As it turns out, no one knows whether Title II actually prohibits the kinds of racial disparities uncovered by the studies.

Not all civil rights laws, after all, allow claimants to use statistically-disparate impacts as evidence of discrimination. Title VI, for example, does not, whereas Title VII does.

This distinction owes, in large part, to the antidiscrimination canon’s “intent requirement,” which draws a doctrinal dividing line between acts exhibiting “discriminatory intent” and those, instead, exhibiting “discriminatory effects.” 180 180. See Implementation of the Fair Housing Act’s Discriminatory Effects Standard, 78 Fed. Reg. 11,460 (Feb. 15, 2013) (codified at 24 C.F.R. § 100.500(1) (2014)). × To oversimplify, acts of intent can be understood as overt, “invidious acts of prejudiced decision-making.” 181 181. Susan Carle, A New Look at the History of Title VII Disparate Impact Doctrine, 63 Flo. L. Rev. 251, 258 (2011). × Acts of effect, meanwhile, are those that “actually or predictably . . . result[] in a disparate impact on a group of persons” even when the explicit intent behind them is not discriminatory. 182 182. See Implementation of the Fair Housing Act’s Discriminatory Effects Standard, supra note 35. ×

Ask Rosa Parks to give up her seat for a white passenger? The civil rights claim filed in response will likely take a narrow view of the interaction, examining the discrete intent behind it. Systematically route buses in such a way that they bypass Rosa Parks altogether? Under the right circumstances, this could be evidence of discrimination equally as troubling as in the former scenario. But the civil rights claim it gave rise to would likely entail a far wider view of the world—one that couched its arguments in statistics. 183 183. Title VII offers plaintiffs a “disparate impact” framework under which they may prove unlawful discrimination alongside the more traditional “disparate treatment” model. 42 U.S.C. § 2000e-2(k)(l)(A) (1994). ×

Today, a tentative consensus holds that theories involving discriminatory effects are available under the Fair Housing Act, the Age Discrimination and Employment Act, certain Titles of the Americans With Disabilities Act, and Title VII of the Civil Rights Act. When it comes to Title II, however, the jury is still out. Neither the Supreme Court, a major circuit court, nor a federal administrative body has resolved the issue to date, and “there is a paucity of cases analyzing it.” 184 184. Hardie v. Nat’l Collegiate Athletic Ass’n, 97 F. Supp. 3d 1163, 1163 (S.D. Cal. 2015), aff’d, 861 F.3d 875 (9th Cir. 2017), and superseded by, 876 F.3d 312 (9th Cir. 2017). ×

B.         Hardie’s Open Question

Uncertainties surrounding Title II’s scope most recently came to a head in Hardie v. NCAA. The case involved a challenge to the collegiate association’s policy of banning convicted felons from coaching certain tournaments. The plaintiff, Dominic Hardie, alleged that the policy disparately impacted blacks, putting the question of Title II’s “discriminatory effect” liability at center stage.

The court of first impression ruled against Hardie, finding that Title II did not cognize such claims. But on appeal, the case’s focal point changed dramatically. In a surprise turn of events, the NCAA abandoned its structural argument against disparate impact liability outright. Instead, it conceded that Title II did, in fact, recognize statistical effects but asserted that the NCAA’s policy was, nonetheless, not a violation. 185 185. See id. (“On appeal, the NCAA does not challenge Hardie’s argument that Title II encompasses disparate-impact claims. . . . Instead, the NCAA asks us to affirm entry of summary judgment in its favor on either of two other grounds advanced below, assuming arguendo that disparate-impact claims are cognizable under Title II.”). ×

Thus, when the case came before the 9th Circuit, the question of whether Title II encompassed discriminatory effects was, essentially, rendered moot. The court ruled in favor of the NCAA’s narrower argument but went out of its way to emphasize that it had not decided the question of discriminatory effect liability. And no other major appeals court has addressed the issue since.

C.         Title II’s Fair Housing Act Moment

It was not long ago that another civil rights centerpiece—the Fair Housing Act of 1968 (FHA)—found itself at a similar crossroads. The FHA makes it illegal to deny someone housing based on race. But a half century after the statute’s passage, the question of whether it prohibited disparate effects had not been tested in our highest court.

By 2015, the Supreme Court had twice taken up the issue in two years. 186 186. See Gallagher v. Magner, 619 F.3d 823, (8th Cir. 2010), cert. dismissed, 565 U.S. 1187, 132 S.Ct. 1306 (2012); Mt. Holly Gardens Citizens in Action, Inc. v. Twp. of Mt. Holly, 658 F.3d 375 (3rd Cir. 2011), cert. dismissed, 571 U.S. 1020, 134 S.Ct. 636 (2013). × And twice, the cases had settled in advance of a ruling.

Then came Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, alleging that a state agency’s allocation of tax credits disparately impacted the housing options of low-income families of color. 187 187. Tex. Dep’t of Hous. & Cmty. Affairs v. Inclusive Cmtys. Project, Inc., 135 S. Ct. 2507, 2514 (2015) [hereinafter “Inclusive Communities”]. × This time, there was no settlement. And the ruling that followed was subsequently described as the “most important decision on fair housing in a generation.” 188 188. Kristen Capps, With Justice Kennedy’s Retirement, Fair Housing Is in Peril, Citylab (Jun. 28, 2018), https://www.citylab.com/equity/2018/06/what-justice-kennedys-retirement-means-for-fair-housing/563924/. ×

Writing for the 5-4 majority, Justice Kennedy affirmed that the FHA extended to claims of both discriminatory intent and effect. 189 189. But his ruling, according to some commenters, took a troublingly narrow view of viable disparate impact claims. × Kennedy was careful to note that the FHA’s passage occurred at a time when explicitly racist policies—such as zoning laws, racial covenants, and redlining—were the norm. But the Justice, nonetheless, stressed that more modern claims alleging racially disparate impacts were also “consistent with the FHA’s central purpose.” 190 190. See Inclusive Communities supra note 42. ×

D.        The New Back of the Bus

Much like the FHA, Title II arrived on the scene when discriminatory effect claims were far from the leading concern among civil rights activists. As Richard Epstein writes:

“Title II was passed when memories were still fresh of the many indignities that had been inflicted on African American citizens on a routine basis. It took little imagination to understand that something was deeply wrong with a nation in which it was difficult, if not impossible, for African American citizens to secure food, transportation, and lodging when traveling from place to place in large sections of the country. In some instances, no such facilities were available, and in other cases they were only available on limited and unequal terms.” 191 191. Richard A. Epstein, Public Accommodations Under the Civil Rights Act of 1964: Why Freedom of Association Counts as a Human Right, 66 Stan. L. Rev. 1241, 1242 (2014). ×

The paradigmatic act of discrimination, in other words, was intentional, overt, and explicitly racial.

Today, however, we are heading toward a world in which this paradigm is apt to turn on its head. Gone will be the days of racially explicit denials of service such as the well-documented phenomena of “hailing a cab while black,” “dining while black,” “driving while black,” or “shopping while black.” 192 192. See, e.g., Matthew Yglesias, Uber and Taxi Racism, Slate (Nov. 28, 2012), http://www.slate.com/blogs/moneybox/2012/11/28/uber_makes_cabbing_while_black_easier.html; Danielle Dirks & Stephen K. Rice in Race and Ethnicity: Across Time, Space, and Discipline 259 (Rodney Coates ed., 2004). × But as an increasing body of evidence suggests, inequality will not simply disappear as a consequence. Rather, discrimination will go digital. And when it does occur, it will likely manifest not as a discrete act of individual intent but instead as a statistically disparate effect.

With this future in view, forecasting the consequences for Title II requires little speculation. Absent the ability to bring statistically-based claims against tomorrow’s data-driven establishments, Title II could be rendered irrelevant. 193 193. In effect, this means that the greatest threat to the statute may not be the doctrinal uncertainty posed by “platform economy businesses,” per se. Instead, it could be the algorithmic “architecture” that drives such companies, regardless of whether they adopt a “platform” business model. ×

If America is to deliver on its guarantee of equal access to public accommodations, its civil rights laws must reach the data-driven delivery services, transportation providers, and logistics operators that increasingly move our society. 194 194. No matter one’s ideological view, the dismantling of legislation through mere technological obsolescence would be a troubling outcome. × Failing to do so simply because these business models were not the norm at the time of the statute’s passage could lead to tragic results. As Oliver Wendell Holmes, Jr. wrote more than a century ago:

“It is revolting to have no better reason for a rule of law than that it was laid down in the time of Henry IV. It is still more revolting if the grounds upon which it was laid down have vanished long since, and the rule simply persists from blind imitation of the past.” 195 195. See Holmes supra note 1 at 469. ×

To save one of our antidiscrimination canon’s most iconic statutes from such a fate, all signs now suggest it will need a doctrinal update. Title II, in software parlance, must become Title 2.0.

III.       A Policy Roadmap for Title 2.0

With the foregoing analysis in our rearview mirror, it is now possible to explore the road ahead. The policy challenges of applying Title II to a data-driven society appear to be at least threefold. Policymakers should establish: (1) whether Title II cognizes statistically-based claims; (2) what modern entities are covered by Title II; and (3) what oversight mechanisms are necessary to detect discrimination by such entities? The following sections discuss these three challenges, as well as the steps policymakers can take to address them through judicial, legislative, or regulatory reform.

A.         Statistically-based Claims in a Data-Driven Society

The first, and most obvious, policy reform entails simply clarifying Title II’s cognizance of statistically based claims. Such clarification could come at the judicial or regulatory level, as occurred with the FHA. Or it could come at the legislative level, as occurred with Title VII.

Though the question of whether litigants can sustain statistical claims under Title II may seem like an all-or-nothing proposition, recent experience shows this isn’t actually true. Short of directly translating Title VII theories to Title II, there exist numerous alternatives. Justice Kennedy himself noted as much in Inclusive Communities when he remarked that “the Title VII framework may not transfer exactly to [all other] context[s].” 196 196. See Inclusive Communities, supra note 42. ×

Nancy Leong and Aaron Belzer convincingly argue that one framing might involve adopting a modern take on discriminatory intent claims. The scholars assert that even if intent is deemed essential under Title II, statistically based claims could nevertheless satisfy the requirement. 197 197. See Leong & Belzer supra note 14, at 1313. × In their telling, the intent requirement could manifest through a company’s “decision to continue using a platform design or rating system despite having compelling evidence that the system results in racially disparate treatment of customers.” 198 198. See id. × Under this view, the claim would then be distinguishable from unintentional claims because “once the aggregated data is known to reflect bias and result in discrimination,” its continued use would constitute evidence of intent. 199 199. See id. Indeed, this argument may become especially compelling in a world where improved digital analytics enable much more customized targeting of individuals or traits. With more fine-grained control over data-driven algorithms, it may become much more difficult to justify the use of those that appear to perpetuate bias against protected groups. ×

Not only would this approach countenance Kennedy’s admonition in Inclusive Communities “that disparate-impact liability [be] properly limited,” 200 200. See Inclusive Communities, supra note 42. × it may also offer an elegant means of addressing the concerns raised by dissenting opinions that Title II claims demonstrate a defendant’s discriminatory “intent.” 201 201. See, e.g. id. (Justice Alito’s dissent highlighted Title II’s “because of” language). × Policymakers should, therefore, take this line of analysis into consideration when clarifying Title II’s scope.

B.         Public Accommodations in a Data-Driven Society

Although this essay has thus far presumed that large-scale algorithmic transportation services like Uber and Amazon are covered by Title II, even that conclusion remains unclear. As enacted, Title II is actually silent as to whether it covers conventional cabs, much less emerging algorithmic transportation models. 202 202. See, e.g., Bryan Casey, Uber’s Dilemma: How the ADA Could End the On Demand Economy, 12 U. Mass. L. Rev. 124, 134 (citing Ramos v. Uber Techs., Inc., No. SA-14-CA-502-XR, 2015 WL 758087, at *11 (W.D. Tex. Feb. 20, 2015)). × A second policy reform, therefore, would entail clarifying whether Title II actually covers such entities in the first place.

Here, understanding the origins of the Civil Rights Act of 1964 is again useful. The statute lists several examples of public accommodations that were typical of America circa 1960. 203 203. Civil Rights Act of 1964, tit. II, 42 U.S.C. § 2000a(b) (2018). × Some courts have suggested that this list is more or less exhaustive. 204 204. See Leong & Belzer supra note 14, at 1296. × But that view is inconsistent with the law’s own language. 205 205. Civil Rights Act of 1964, tit. II, 42 U.S.C. § 2000a(a) (2018) (prohibiting discrimination in “establishment[s] affecting interstate commerce”). × And numerous others have taken a broader view of the term “public accommodations,” which extends to entities that were not necessarily foreseen by the statute’s original drafters. 206 206. See, e.g., Miller v. Amusement Enters., Inc., 394 F.2d 342, 349 (5th Cir. 1968) (“Title II of the Civil Rights Act is to be liberally construed and broadly read.”). ×

Policymakers in search of analogous interpretations of public accommodations laws need look no further than the Americans With Disabilities Act (ADA). Like Title II, the ADA covers places of public accommodation. And, again like Title II, its drafters listed specific entities as examples—all of which were the types of brick-and-mortar establishments characteristic of the time. But in the decades since its passage, the ADA’s definition has managed to keep pace with our increasingly digital world. Multiple courts have extended the statute’s reach to distinctly digital establishments, including popular websites and video streaming providers. 207 207. See Nat’l Ass’n of the Deaf v. Netfix, Inc., 869 F Supp. 2d 196, 200-02 (D. Mass. 2012) (holding the video streaming service constitutes a “public accommodation” even if it lacks a physical nexus); National Federation of the Blind v. Scribd Inc., 97 F. Supp. 3d 565, 576 (D. Vt. 2015) (holding that an online repository constitute a “public accommodation” for the purpose of the ADA). But see Tara E. Thompson, Comment, Locating Discrimination: Interactive Web Sites as Public Accommodations Under Title II of the Civil Rights Act, 2002 U. Chi. Legal F. 409, 412 (“The courts, however, have not reached a consensus as to under what circumstances ‘non-physical’ establishments can be Title II public accommodations.”); Noah v. AOL Time Warner Inc., 261 F Supp. 2d 532, 543-44 (E.D. Va. 2003) (holding that online chatroom was not a “public accommodation” under Title II). ×

Policymakers should note, however, that Uber and Lyft have fiercely resisted categorization as public accommodations. 208 208. See Casey, supra note 57. The Department of Justice and numerous courts have expressed skepticism of this view. But, to date, there has been no definitive answer to this question—due in part to the tendency of lawsuits against Uber and Lyft to settle in advance of formal rulings. × In response to numerous suits filed against them, the companies have insisted they are merely “platforms” or “marketplaces” connecting sellers and buyers of particular services. 209 209. See id. × As recently as 2015, this defense was at least plausible. And numerous scholars have discussed the doctrinal challenges of applying antidiscrimination laws to these types of businesses. 210 210. See generally id.; Leong & Belzer supra note 14. × But increasingly, companies like Uber, Lyft, and Amazon are shifting away from passive “platform” or “marketplace” models into more active service provider roles. 211 211. See Bryan Casey, A Loophole Large Enough to Drive an Autonomous Vehicle Through: The ADA’s “New Van” Provision and the Future of Access to Transportation, Stan. L. Rev. Online (Dec. 2016), https://www.stanfordlawreview.org/online/loophole-large-enough/ (describing Uber’s and Lyft’s efforts to deploy autonomous taxi fleets). Other platform companies in different sectors are acting similarly. See, e.g., Katie Burke, Airbnb Proposes New Perk For Hosts: A Stake in The Company, San Francisco Bus. Times (Sept. 21, 2018), https://www.bizjournals.com/sanfrancisco/news/2018/09/21/airbnb-hosts-ipo-sec-equity.html. × All three, for example, now deploy transportation services directly. And a slew of similarly situated companies appear poised to replicate this model. 212 212. See Casey, supra note 66(noting the ambitions of Tesla, Google, and a host of others to deploy similar autonomous taxi models). × For most such companies, passive descriptors like “platform” or “marketplace” are no longer applicable. Our laws should categorize them accordingly.

C.         Oversight in a Data-Driven Society

Finally, regulators should consider implementing oversight mechanisms that allow third parties to engage with the data necessary to measure and detect discrimination. In an era of big data and even bigger trade secrets, this is of paramount importance. Because companies retain almost exclusive control over their proprietary software and its resultant data, barriers to accessing the information necessary even to detect algorithmic impacts often can be insurmountable. And the ensuing asymmetries can render discrimination or bias effectively invisible to outsiders.

Another benefit of oversight mechanisms is their ability to promote good corporate governance without the overhead of more intrusive command-and-control regulations. Alongside transparency, after all, comes the potential for extralegal forces such as ethical consumerism, corporate social responsibility, perception bias, and reputational costs to play meaningful roles in checking potentially negative behaviors. 213 213. See Bryan Casey, Amoral Machines; Or, How Roboticists Can Learn to Stop Worrying and Love the Law, 111 Nw. U. L. Rev. Onlineat 1358. There was, for example, a happy ending to the recent revelations regarding racial disparities in Amazon delivery services. See Spencer Soper, Amazon to Fill All Racial Gaps in Same-Day Delivery Service, Bloomberg (May 6, 2016), https://www.bloomberg.com/news/articles/2016-05-06/amazon-to-fill-racial-gaps-in-same-day-delivery-after-complaints. × By pricing externalities through the threat of public or regulatory backlash, these and other market forces can help to regulate sectors undergoing periods of rapid disruption with less risk of chilling innovation than traditional regulation. 214 214. As importantly, this encourages proactive antidiscrimination efforts as opposed to retroactive ones. See Mark Lemley & Bryan Casey, Remedies for Robots, U. Chi. L. Rev. (forthcoming 2019). Without meaningful oversight, the primary risk is not that industry will intentionally build discriminatory systems but that “[biased] effects [will] simply happen, without public understanding or deliberation, led by technology companies and governments that are yet to understand the broader implications of their technologies once they are released into complex social systems.” See Alex Campolo et. al, AI Now 2017 Report (2017). ×

Some scholars have proposed federal reforms—akin to those put forward by the Equal Employment Opportunity Commission, 215 215. 29 C.F.R. § 1602.7 (1991). × the Department of Housing and Urban Development, 216 216. 24 C.F.R. §§ 1.6, 1.8 (1996). × and the Department of Education 217 217. 34 C.F.R. § 100.6 (1988). × —as a means of implementing oversight mechanisms for Title II. 218 218. See Leong and Belzer supra note 14. × But state-level action, in this instance, may be more effective. A multi-fronted push that is national in scope provides a higher likelihood of successful reform. And much like the “Brussels Effect” documented at an international level, intra-territorial policies imposed on inter-territorial entities can have extra-territorial effects within the U.S. 219 219. See Anu Bradford, The Brussels Effect, 107 Nw. U. L. Rev. 1 (2012). × As the saying goes: “As goes California, so goes the nation.” 220 220. This saying is equally applicable to numerous other populous states. ×

As a parting note, it cannot be stressed enough that mere “disclosure” mechanisms are not necessarily enough. 221 221. See Andrew Selbst & Solon Barocas, The Intuitive Appeal of Explainable Machines, Fordham L. Rev. (forthcoming 2019). × For oversight to be meaningful, it must be actionable—or, in Deirdre Mulligan’s phrasing, “contestable.” 222 222. Dierdre Mulligan, et al., Privacy is an Essentially Contested Concept: A Multi-Dimensional Analytic For Mapping Privacy, 374 Phil. Trans. R. Soc. 1, 3 (2016), https://www.law.berkeley.edu/wp-content/uploads/2017/07/Privacy-is-an-essentially.pdf. × That is, it must allow downstream users to “contest[] what the ideal really is.” 223 223. See id. × Moreover, if oversight is to be accomplished through specific administrative bodies, policymakers must ensure that those bodies have the technical know how and financial resources available to promote public accountability, transparency, and stakeholder participation. Numerous scholars have explored these concerns at length, and regulators would do well to consider their insights. 224 224. See, e.g., id.; Solon Barocas & Andrew Selbst, Big Data’s Disparate Impact, 104 Cal. L. Rev. 671 (2016); Lilian Edwards & Michael Veale, Slave to the Algorithm? Why a “Right to an Explanation” Is Probably Not the Remedy You Are Looking For, 16 Duke L. & Tech. Rev. 21 (2017); Alex Campolo et al., supra note 69; Bryan Casey et al., Rethinking Explainable Machines: The GDPR’s ‘Right to Explanation’ Debate and the Rise of Algorithmic Audits in Enterprise, Berk. Tech. L. J. (forthcoming 2019). ×

Conclusion

Following any major technological disruption, scholars, industry leaders, and policymakers must consider the challenges it poses to our existing systems of governance. Will the technology meld? Must our policies change?

Algorithmic transportation is no exception. This piece examines its implications for one of America’s most iconic statutes: Title II of the Civil Rights Act of 1964. As algorithms expand into a vast array of transportation contexts, they will increasingly test the doctrinal foundations of this canonical law. And without meaningful intervention, Title II could soon find itself at risk of irrelevance.

But unlike policy responses to technological breakthroughs of the past, those we have seen so far offer genuine hope of timely reform. As Ryan Calo notes, unlike a host of other transformative technologies that escaped policymakers’ attention until too late, this new breed “has managed to capture [their] attention early [] in its life-cycle.” 225 225. See Ryan Calo, Artificial Intelligence Policy: A Primer and Roadmap, U.C. Davis L. Rev. (forthcoming 2018). ×

Can this attention be channeled in directions that ensure that our most important civil rights laws keep pace with innovation? That question, it now appears, should be on the forefront of our policy agenda.


Legal Fellow, Center for Automotive Research at Stanford (CARS); Affiliate Scholar of CodeX: The Center for Legal Informatics at Stanford and the Stanford Machine Learning Group. The author particularly thanks Chris Gerdes, Stephen Zoepf, Rabia Belt, and the Center for Automotive Research at Stanford (CARS) for their generous support.

By David Redl

Cite as: David Redl, The Airwaves Meet the Highways
2019 J. L. & Mob. 32.

I applaud and congratulate the University of Michigan for launching the Journal of Law and Mobility. The timing is perfect. The information superhighway is no longer just a clever metaphor. We are living in an era where internet connectivity is a critical part of making transportation safer and more convenient.

Internet connectivity has powered the U.S. and global economies for years now. In the early stages, dial-up connections enabled users to access a vast store of digital information. As the internet and its usage grew, so did the demand for faster broadband speeds. Finally, wireless networks untethered the power of broadband Internet so consumers could have fast access when and where they want it.

We are now seeing technology advances in the automotive sector begin to better align with what has occurred in the communications space. The possibilities for what this means for human mobility are truly exciting. Challenges abound, however, with questions around the security and safety of self-driving vehicles and how to create the infrastructure and policies needed for vehicle connectivity. While many of these will be sorted out by the market, policy levers will also play a role.

In the late 1990s, the Federal Communications Commission (FCC) agreed to set aside radio frequencies for intelligent transportation systems (ITS), persuaded that emerging advances in communications technologies could be deployed in vehicles to increase safety and help save lives. 226 226. Amendment of Parts 2 and 90 of the Commission’s Rules to Allocate the 5.850-5.925 GHz Band to the Mobile Service for Dedicated Short Range Communications of Intelligent Transportation Services, Report and Order, 14 FCC Rcd. 18221 (Oct. 22, 1999). × Specifically, the FCC allocated the 75 megahertz of spectrum between 5850-5925 MHz (5.9 GHz band) for ITS. 227 227. Id. × The automobile industry’s technological solution was to rely primarily on a reconfiguration of IEEE Wi-Fi standards 228 228. The Working Group for WLAN Standards, IEEE 802.11 Wireless Local Area Networks, http://www.ieee802.org/11/ (last visited Oct. 31, 2018). × suitable for ITS (802.11p) so vehicles could “talk” to one another and to roadside infrastructure. 229 229. Accepted nomenclature for these communications include vehicle-to-vehicle (V2V), vehicle-to-infrastructure (V2I), or more generally vehicle-to-x (V2X). Other applications include vehicle-to-pedestrian. × The FCC in turn incorporated the Dedicated Short Range Communications (DSRC) standards into its service rules for the 5.9 GHz band. 230 230. Amendment of the Commission’s Rules Regarding Dedicated Short-Range Communication Services in the 5.850-5.925 GHz Band (5.9 GHz Band), 19 FCC Rcd. 2458 (Feb. 10, 2004). ×

The National Telecommunications and Information Administration (NTIA), by statute, is the principal advisor to the President of the United States on information and communications policies, including for the use of radiofrequency spectrum. NTIA also is responsible for managing spectrum use by federal government entities. As such, NTIA seeks to ensure that our national use of spectrum is efficient and effective. Over the past two decades, innovations in wireless technologies and bandwidth capacity have completely changed what is possible in connected vehicle technology. 2G wireless evolved to 3G, and then 4G LTE changed the game for mobile broadband. 5G is in the early stages of deployment. Meanwhile, Wi-Fi not only exploded in usage but in its capability and performance. Many vehicles in the market today are equipped with wireless connectivity for diagnostic, navigation and entertainment purposes. Yet DSRC as a technology remains largely unchanged, notwithstanding recent pledges from proponents to update the standard. 231 231. See IEEE Announces Formation of Two New IEEE 802.11 Study Groups, IEEE Standards Association (June 5, 2018), https://standards.ieee.org/news/2018/ieee_802-11_study_groups.html. × This stasis persists despite the technological leaps of advanced driver assistance systems, enhanced by innovations in vehicular radars, sensors and cameras.

This situation is not new or novel as traditional industries continue to grapple with the pace of technological change in the wireless sector.  In fact, the automotive sector has faced the challenge of wireless technological change before, struggling to adapt to the sunset of the first generation of analog wireless networks.  This leads to the question of whether, as some promise, DSRC effectively broadens a vehicle’s situational awareness to beyond line-of-site as the industry creeps toward autonomous driving – or has innovation simply left DSRC behind? The answer is important to the question of whether it makes sense to continue with DSRC for V2X communications.  Regardless of how the question is answered, we must address who should answer it.

One distinction between V2X communications for safety applications and most other communications standards choices is that a fragmented market could have drastic consequences for its effectiveness, given that vehicles must be able to talk to each other in real time for the entire system to work. This is why the National Highway Transportation Safety Administration (NHTSA) initially proposed a phased-in mandate of DSRC beginning with cars and light trucks. 232 232. See Federal Motor Vehicle Safety Standards; V2V Communications, 82 Fed. Reg. 3854 (Jan. 12, 2017). ×

This question of whether to mandate DSRC has also been complicated by inclusion in 3GPP standards of a cellular solution (C-V2X), first in Release 14 for 4G/LTE, 233 233. Dino Flore, Initial Cellular V2X Standard Complete, 3GPP A Global Initiative (Sept. 26, 2016), http://www.3gpp.org/news-events/3gpp-news/1798-v2x_r14. The updates to the existing cellular standard are to a device-to-device communications interface known as the PC5, the sidelink at the physical layer, for vehicular use cases addressing high speed and high density scenarios. A dedicated band is used only for V2V communications. × and continuing with Release 15 and especially Release 16 for 5G, targeted for completion in December 2019. 234 234. Release 16, 3GPP: A Global Initiative (July 16, 2018), https://www.3gpp.org/release-16. × It raises the legitimate question of whether leveraging the rapid innovation and evolution in wireless communication technology is the right way to ensure automotive safety technology benefits from the rapid pace of technological change, and what role the federal government should play in answering these questions.

Despite the federal government’s legitimate interest in vehicle safety, as is true in most cases I question whether the federal government should substitute its judgement for that of the market. A possible solution that strikes a balance between legitimate safety needs and technological flexibility are federal performance requirements that maintain technological neutrality.

Moreover, because the spectrum environment has changed drastically since the 1990s many are questioning whether protecting this 75 megahertz of mid-band spectrum for ITS use is prudent. The 5.9 GHz band is adjacent to spectrum used for Wi-Fi 235 235. Table of Frequency Allocations, 47 C.F.R. § 2.106 (2018). × , which makes it unsurprising that some are calling for access to 5.9 GHz spectrum as a Wi-Fi expansion band. 236 236. Sean Kinney, Is DSRC Dead? Cable cos want FCC action on 5.9 GHz, RCR Wireless News, (Oct. 17, 2018), https://www.rcrwireless.com/20181017/policy/dsrc-fcc-cable-companies. × Other still question whether V2V safety communications require protected access to all 75 megahertz. NTIA, the FCC, and the Department of Transportation continue to study the feasibility of whether and how this band might be shared between V2V and Wi-Fi or other unlicensed uses and remain committed to both the goal of increased vehicle safety and the goal of maximum spectrum efficiency. 237 237. See DSRC and U-NII-4 Prototype Device Testing, Federal Communications Commission, https://www.fcc.gov/oet/unii-4banddevice (last visited Nov. 1, 2018). ×

While I am optimistic that wireless technologies will bring a new level of safety to America’s roadways, a number of other policy and legal issues, including user privacy and cybersecurity, will persist as challenges despite being addressed in current solutions. If we are to see the kind of adoption and reliance on V2X safety applications and realize the systemic improvements in safety they portend, Americans must have trust in the security and reliability of these technologies.

The marriage of communications technology with transportation will help define the 21st century, and potentially produce enormous benefits for consumers. A lot of work remains, however, to ensure we have the right laws, regulations and policy frameworks in place to allow private sector innovation to flourish. This forum can play an important role in moving the dialogue forward.


David Redl is the Assistant Secretary for Communications and Information at the U.S. Department of Commerce, and Administrator of the National Telecommunications and Information Administration.