The ACCC has accepted a court-enforceable undertaking from e-scooter rental company Lime Network Pty Ltd (Lime) to address the ACCC’s concerns regarding misrepresentations about the safety of its Generation 2 (Gen 2) model of e‑scooters and to comply with its product safety reporting obligations.
The ACCC considers Lime misrepresented to consumers that its Gen 2 e-scooters were safe to use when in fact it did not disclose to consumers a safety issue it was aware of.
In certain circumstances, Lime’s Gen 2 e-scooters would apply excessive brake force, or locking, occurring on the front wheel, causing it to stop suddenly. Serious injuries suffered by consumers as a result included broken bones, damaged teeth, cuts and abrasions.
“Misrepresenting the safety of a product can have very serious consequences,” ACCC Commissioner Sarah Court said.
“Businesses must disclose known issues so that consumers can take extra precautions if they still choose to use the products.”
The ACCC was also concerned that Lime failed to comply with mandatory injury reporting requirements on at least 50 occasions for injuries arising from Gen 2 e-scooters in Australia and outside Australia.
“All businesses are reminded that if a person has suffered a serious injury, illness or death associated with using their product either in or outside Australia, they must report it under the provisions of the Australian Consumer Law,” Ms Court said.
Lime also failed to notify the Commonwealth Minister about the firmware updates Lime applied to its Gen 2 e-scooters in February and March 2019 which specifically fixed the safety issue, as required by product safety laws.
“The ACCC considers that Lime was required to give written notice to the Commonwealth Minister within two days of applying each firmware update, because this was effectively action to recall the Gen 2-e-scooters.”
“Notifying the Government of such incidents, and action taken to specifically address a product safety hazard is a vital part of our product safety regime,” Ms Court said.
Lime has acknowledged its conduct was likely to have contravened the Australian Consumer Law, and has admitted that each time it failed to report a serious injury to the Commonwealth Minister it breached its Australian Consumer Law reporting obligations.
Lime suspended its e-scooter operations in Australia in March 2020 due to the COVID-19 pandemic and the public health measures imposed by governments.
If Lime recommences its operations in Australia, it has also undertaken to supply only Gen 3 or other later models of e-scooters for hire, to address any safety issues or defects affecting its e‑scooters and to implement a comprehensive compliance program.
A copy of the undertaking is available at Lime Network Pty Ltd.
Background
Lime is the Australian subsidiary of Neutron Holdings Inc. (Neutron), which provides dockless bicycle and e-scooter rentals to metropolitan areas and universities around the world. Users locate, unlock and pay to hire the devices via Lime’s smartphone application.
In Australia, Lime has offered its Gen 2 e-scooters for hire in the following locations:
- Brisbane, from 16 November 2018 to 23 March 2020;
- Adelaide, from 15 February 2019 to 14 April 2019; and
- Victoria’s Monash University Clayton campus, from 7 to 14 November 2018 for a trial period, with the e-scooters remaining available for use on campus until 10 December 2018.
In addition, Lime has offered its newer Generation 3 (Gen 3) model e-scooters for hire in Brisbane, from 11 February 2020 to 23 March 2020.
The Gen 3 e-scooter has a different design to the Gen 2 e-scooter, and is equipped with both an electronic brake on the rear wheel as well as a mechanical drum brake on the front wheel. Lime has advised the ACCC that Gen 3 e-scooters do not run firmware ever known to be affected by the issues experienced with Gen 2 e-scooters.
The circumstances in which Gen 2 e-scooters would experience the sudden stopping issue included when users rode downhill at top speed, or hit a pothole or other obstacle.
Lime has also agreed to publish a statement about the terms of the undertaking and the ACCC’s concerns with its conduct.
