Why you should think twice before riding a Lime e-bike

You really should read those terms and conditions

A Lime e-bike

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17 min

Samsung's notorious Galaxy Note 7 smartphone had a tendency to spontaneously combust due to a design flaw with the lithium ion battery. The battery in an electric bicycle (e-bike) is approximately 100 times larger than a phone battery. Imagine sitting on a pile of 100 Galaxy Note 7 phones. That is how much potential there is for things to go wrong with e-bikes.

A company called Lime recently launched an e-bike rental scheme in Sydney, Melbourne and Brisbane. If you're thinking of hopping on one of those green bikes, you should actually read the terms and conditions first.

If you get injured by a Lime bike because of bad luck, incompetence or negligence by Lime, you cannot take any normal legal action against them. By agreeing to their villainous terms and conditions, users give away the right to class actions, as well as individual legal actions, substituting them with arbitration.

Class actions allow people to group together to take action against a company who systematically harmed many people due to incompetence or malice. Famous examples of class actions include the time Sony deliberately infected millions of computers with malware, and when Pacific Gas and Co. knowingly dumped carcinogens into local groundwater. Lime's terms take away both your right to class action, as well as individual legal action, which leaves very little legal protection to prevent them from misbehaving. If Lime conduct their business ethically, legally, and competently, there is no reason why they should need a clause protecting them from class actions, let alone 3 clauses.

Lime's terms replace replace the possibility of normal legal action with arbitration. Arbitration means that instead of having your case heard in a court of law with a jury of peers, your case is heard in a privatised kangaroo court. The "judge" may be a contractor of Lime, and the customer almost never wins. Even this poor avenue for justice may not be available to you, because Section 2.4 implies that customers outside the USA cannot arbitrate either. Lime are still able to take action against you in a real court though.

Lime's terms and conditions are longer than my honours thesis. Large chunks are not at all applicable to Lime bikes. At one point they even try to exempt themselves from the Constitution. The most notable clauses are:

I am not a lawyer. I suspect that many of the clauses are legally invalid, because some consumer rights are inalienable. For example, many "no refunds" policies do not take away your right to a refund. However you would have to take Lime to court to find out which terms hold up judicial scrutiny. It is also unclear how the laws work across international borders. Australia has far stronger consumer protections than the US, however Section 2.9 says that you give up Australian laws and agree to be bound by US laws. I am not sure whether that is legally valid. Lime did not respond to my questions. (Section 12.23 of their terms and conditions say they are not obliged to reply.)

I am not alleging that Lime have committed any bad acts, only that their terms say that they can. This is still bad. If someone points a loaded gun at you and promises not to shoot, would you feel safe?

The Full List

Terms and Conditions

Lime's terms and conditions can be found here (Internet Archive copy). Here is a more comprehensive and detailed list of the notable terms and conditions:

Section 2.3 states (emphasis added):

Any and all disputes arising between you and Lime (whether based in contract, law, statute, rule, regulation, ordinance, tort including, but not limited to, fraud, any other intentional tort or negligence, common law, constitutional provision, respondeat superior, agency and/or any other legal or equitable theory), whether arising before or after the effective date of this agreement, must be resolved by final and binding arbitration. This includes any and all disputes based on any product, service or advertising connected to the provision or use of the services ... by agreeing to arbitrate, each party is giving up its right to go to court and have any dispute heard by a judge or jury

This is the first clause which removes your right to take Lime to court if they are negligent, incompetent or malicious. Sections 2.4 and 2.8 act as a second and third clause to protect Lime against class action and individual legal action. Here's a nice joke I heard once which helps explain the importance of class actions.

A businessman sells 1000 raffle tickets for $1 each, which gives him $1000. He claims that the raffle prize is a large bull.

A week after declaring a winner, he delivers the worthless corpse of a dead bull to the winner's farm.

The winner is aghast, because this is not the prize he was promised. So the businessman politely refunds the winner's $1.

Usually class action laws would prevent the businessman from keeping the remaining $999. However Lime have 3 clauses exempting them from those protections. They are clearly trying very hard to prevent class action suits. It makes you wonder whether they know something about their service which we do not.

Section 2.4 states that

[arbitration] will be conducted in the "metropolitan statistical area" (as defined by the U.S. Census Bureau) where You are a resident at the time the Dispute is submitted to arbitration

So if you're an Australian, you may not even be able to have an arbitration hearing.

The Arbitrator may award declaratory or injunctive relief only in favor of the claimant and only to the extent necessary to provide relief warranted by the claimant's individual claim.

So if Lime designed their batteries incompetently and they start exploding and injuring people, you can only arbitrate to get back money for your individual medical bills (and as mentioned before, this is capped at $100 by Section 7.3). You cannot arbitrate for a larger amount of money which reflects the harm Lime would have done to society at large. This means that Lime is financially protected against large scale fuck-ups.

Section 2.6 imposes a 1 year statute of limitations on claims against them. If Lime use asbestos to make their brake pads and you do not notice until you start dying of asbestosis a decade later, you cannot take any legal action (even arbitration) against them.

Section 2.7 states that whilst you cannot take them to court (only arbitration), they can still take you to court.

Section 2.7 is also the first mention of "Lime's intellectual property rights". Lime's obsession with copyright is strange, given that they are a hardware rental company. Also, "intellectual property rights" are a deliberately imprecise term, crafted to blur the lines between copyright, patents, trademarks and trade secrets. Each of those legally enforced monopolies exist for unrelated reasons.

Section 3.2 states that

Lime reserves the right to modify or cancel Discounts at any time

Similarly, Section 4.3 states the following with unnecessary caps-lock:

PLEASE NOTE THAT YOU WILL NOT RECEIVE A NOTICE FROM US THAT YOUR FREE TRIAL HAS ENDED OR THAT THE PAID PORTION OF YOUR SUBSCRIPTION HAS BEGUN. WE RESERVE THE RIGHT TO MODIFY OR TERMINATE FREE TRIALS AT ANY TIME, WITHOUT NOTICE AND IN OUR SOLE AND ABSOLUTE DISCRETION.

So you may hop on a bike thinking that you've got a 90% discount or a free trial, but then Lime decides to charge you the full price anyway.

If you pay for a monthly or yearly membership, they can cancel it at any time without refunding you, for any reason. For example, they can cancel your annual membership with 364 days remaining, without giving you a refund.

According to Section 4.4:

If there are any discrepancies in billing, You hereby waive Your right to dispute such discrepancies if You do not notify Lime within sixty (60) days after they first appear on an account statement.

So if they over-charge you for a ride (such as charging you $600 for not locking the bike even though you really did), and you do not notice for 2 months, you will not ever get that money back.

In Section 4.8 they claim that an order confirmation is not confirmation that they accept your order. They may reject your valid order after the order is confirmed, for any reason. I wonder what Lime think the purpose of an "order confirmation" is.

Section 4.9 claims:

We do not warrant that specifications or pricing on the Services is complete, accurate, reliable, current, or error-free.

So even though the app may say that it is "only $1 to unlock", they may be planning to charge you $100 to unlock. I recommend keeping an eye on your bank account, so that you can notify them of any over-charging before the short time window they impose expires.

One of the most bizarre sections is Section 4.9.

If a product You purchased from Lime is not as described, Your sole remedy is to return it in unused condition, complete and undamaged, in the original packaging.

This is not at all applicable to Lime. The only products they offer are bikes and scooters which you find on the footpath, unwrapped. So how can you return it in the "original packaging"? Where do you return it to? I suspect they blindly copied and pasted their terms and conditions from some boilerplate template, without reading it. If they cannot be bothered to read their own terms and conditions then it is unreasonable to expect users to read it, let alone every time you ride.

Lime's terms and conditions are incredibly long. It took me over two hours to read them all. If you use a 'read later' service such as Pocket to save the terms and conditions across devices for offline reading in a format accessible for visually-impaired people, you are technically violating Section 12.8. That is because you are not allowed to download "the Content" to non-temporary storage. For the same reason, services like The Internet Archive are prohibited from making a copy of Lime's terms and conditions.

Section 4.11 states that if your legal name sounds fake, they can refuse service.

Section 6.2.4 states that

[Lime] make no representations, warranties, endorsements, or promises ... as to ... security associated with the transmission of Your User Submissions transmitted to Lime via the Services

Similarly Section 4.11 states:

You are entirely responsible for the security and confidentiality of Your password and account

If you read this literally, it means Lime is not responsible for the security and confidentiality of your password and your account. So they claim to have no obligation to used standard best practice for digital security, such as encrypting traffic, or hashing and salting (scrambling) passwords. Given that your account includes location history, financial payment details, and many other pieces of personal information, it is unsettling that their terms do not provide a clearer obligation upon them to be secure. Thankfully other laws do over-rule this and force Lime to treat your information somewhat securely, however it is not clear from Lime's User Agreement that they are aware of this.

That same section also says:

Please note that anyone able to provide Your personally identifiable information will be able to access Your account so You should take reasonable steps to protect this information

It is not clear what information is required to gain access to your account. Probably name, birthday, email address and phone number. How many people and organisations already know those 4 things about you?

Shockingly Section 5.1 claims that you and your family cannot take legal action against anyone associated with Lime, even action unrelated to Lime.

You and for all of Your family ... fully and forever release and discharge all Released Persons for any and all Claims that You have or may have against any Released Person

Lime probably did not intend this clause to be that broad. However they could have clarified "any and all claims" to restrict it to claims related to the service. They chose not to make that restriction.

Two years ago a Queensland police officer deliberately leaked location information to his friend about the friend's partner, who was trying to escape the physical and sexual abuse committed by that friend. According to Section 5.1, if a Lime employee does the same thing with the location data they have, that victim cannot take any legal action against lime. There are hopefully Australian laws which over-rule this clause. However as mentioned before, it is unclear whether Australian laws even apply at all, since users agree to release Lime from those laws, replacing them with American laws instead. (Section 2.9) Therefore the presence of such a clause is cause for concern. Why did Lime write a clause which protects individual employees who do the wrong thing?

Lime's terms and conditions are already extremely long, dull and hard to read. Section 5.2 takes it one step further, with legalese so strong that I can not guess what they're trying to protect themselves from.

You expressly agree and acknowledge that You may discover facts or law different from, or in addition to, the facts or law that You know or believe to be true with respect to the Claims and the Released Persons.

What does that even mean?

Lime's user agreement is full of excessive caps-lock. Section 6.2 is such an example.

ALL OF THE SERVICES, PRODUCTS, AND RELATED EQUIPMENT ARE PROVIDED "AS IS", "AS AVAILABLE" AND "WITH ALL FAULTS" (AND YOU RELY ON THEM SOLELY AT YOUR OWN RISK)

This means that if their bikes are designed hazardously, they are not at fault. You bear all the risk of possible faulty brakes and spontaneously-combusting batteries. Furthermore, Section 7.4 states that any injuries they cause are not their fault, even if you get injured from "known" and "foreseeable" risks. As if this was not bad enough, Section 7.4.5 adds that.

if Your use of any of the Services, Products, and/or related equipment causes any injury or damage to another person or property, then You will be liable for any and all consequences, claims, demands, causes of action, losses, liabilities, damages, injuries, fees, costs and expenses, penalties, attorneys' fees, judgments, suits and/or disbursements of any kind, or nature whatsoever, whether foreseeable or unforeseeable, and whether known or unknown

I am not sure what precisely "Your use" means. I interpret it to mean that if Lime knows about a fault with their bike, then you ride it and that fault causes someone else to get injured, you will be liable, not Lime (because that injury would not have happened if you had not used the service).

If you die because of a faulty Lime bike, Lime claim they are not liable. (Section 12.3.3) Once again, Lime could have limited this clause to death that is not Lime's fault (e.g. collision with a drunk driver). However they chose not to make such a restriction, instead preventing you from taking action against them even if they are negligent or reckless.

I wonder why Lime needs five separate clauses to protect themselves from legal action in response to life-threatening incompetence and malpractice.

Section 6.2.6 is a very broad 'Get Out of Jail Free card' saying that any claims Lime make about their service can be false. If you point out such false statements, product faults or safety issues, they have no obligation to fix them. (Section 6.2.7)

Section 12.7 is a worrying clause, because it is not at all necessary for a share bike rental service.

[You] give Your full and unconditional consent to Lime ... the right to photograph, videotape ... Your use of the Services, at any time ... and (c) the right to use, ... distribute, ... and exploit, at any time ... such photographs, videos, and other recordings. ... [You] waive, release, and discharge Lime and all Released Persons from all Claims that You have or may have for any libel, defamation, invasion of privacy

How does this clause even apply to bicycle rental through an app? Does Lime want to be able to switch on your phone's camera and microphone without your knowledge, or embed a camera in the bike itself? Will Lime staff wander around the city taking marketing photos of users on Lime bikes without notifying them? Will Lime post videos of your embarrassing tumbles on YouTube? I do not see how this clause is necessary.

Most of Section 12 is simply not applicable. Those clauses are all about users posting content to a web service, which is not relevant for a share bike company. This is yet another oddity which makes me suspect Lime blindly copied and pasted their terms from a template, without thoroughly reading them. For example, Section 12.11 talks about "Your submissions" and gives them "the unfettered right to sublicense such rights, in perpetuity throughout the universe". (Emphasis added.)

DMCA is a legal framework for legally enforceable copyright takedown requests. For example, movie studios issue DMCA takedown notices when they want Google to delete pirated movies hosted on YouTube. Lime are a bicycle hire company who do not have a website where users can upload content. So I cannot think of any reason why Lime's terms needed to include DMCA clauses. (Section 12.24)

Lime will not let you use Lime's trademark in any way without their explicit permission. (Section 12.10) If you take a photo of a public space which happens to show a Lime logo on a bike which is in the background, that is a violation of their terms. If you write a tweet or send a WhatsApp message mentioning the name "Lime", that is a violation too.

That same section prohibits me from using a picture of a Lime bike up the top of this article. It even prohibits me from using the word "Lime" in this article.

[You are not allowed to] post ... Lime trademarks in any way, including ... publicity pertaining to distribution of materials on the Services, without Lime's prior written consent

I do not want my freedom of speech to be limited by a bicycle hire company, which is one reason why I have not agreed to Lime's User Agreement, and wrote this article instead. Once again this is a clause which is needlessly broad. They are restricting your rights significantly, without justification. Australia and the USA have laws to cover misrepresentation of a company, and defamation. Lime's trademark is already protected by all the normal trademark laws. I cannot think of any reasonable justification why such laws are not sufficient for a bike rental company.

As mentioned above, Section 12 is mostly irrelevant clauses about posting user content to a website. Section 12.13 states that if they think it is "likely" that you will submit content they do not like, they can do anything to "cure" that. For example, if they see you post a strong political opinion on Facebook, they can cancel your account (without refund).

Read the following extract from Section 12.16 while keeping in mind that this is a company whose sole business is short term bicycle (and scooter) hire.

There may also be risks of dealing with ... international trade issues

Is that really necessary? Lime are asking users to read the entirety of these terms every single time they ride. I do not get the impression that they tried to keep these terms brief enough to be user friendly.

If you lose your phone, what is the first thing that comes to mind? Thanks to Section 12.21, you are obliged to tell notify Lime. Have you ever told your friend or partner what your phone's lockscreen code is? If you do, you are obliged to notify Lime of this.

Section 12.23 is a huge wall of text, which contains a few noteworthy points. As mentioned earlier, it states that Lime are not obliged to respond to any enquiries. In general, most people visiting websites and using apps click "I agree" without actually reading the terms and conditions they are agreeing to. If you're better than that and actually skim through the terms, you still do not actually know what you're agreeing to. This section of Lime's terms state that the headings in their terms are meaningless. Only the smallest fine print really matters. Even if you do read all the fine print, it does not provide any meaningful guarantee. Thanks to Section 12.25 Lime can change the terms and your next use is assumed to be an agreement. They only need to "notify you", which can involve simply updating the web page which is linked to in the app menu. This is probably why (Section 12.25.5) makes you promise to read the whole terms and conditions and privacy statement each time you ride.

One of the most shocking sections is Section 12.23.

Lime makes no representation that the Services is appropriate or available for use beyond the U.S.A

This is surprising because Sydney, Brisbane and many other non-American cities are listed on the "Location" page of Lime's website. If you open up their app you will see bike icons in Sydney. So apparently an icon on a map of Sydney in Lime's app showing a Lime bicycle located in Sydney, corresponding to a physical Lime bike which Lime put in Sydney is not a "representation" that Lime bikes are available in Sydney.

Privacy policy

Lime's privacy policy can be found here (archive).

Surprisingly there are some reasonable parts to the privacy policy.

Conclusion

We all know that there are countless companies these days with needlessly long terms and conditions, written in legalese, which take away your rights. However I believe that Lime's terms are far worse than most companies. There are 5 clauses protecting them from legal action in response to life-threatening malpractice and incompetence. There are 6 clauses giving them the power to discriminate against you, as well as clauses which restrict your right to free speech.

Is all this really worth it just for bicycle rental?