White & Case Technology Newsflash
New UK regulations offer new opportunities for micromobility sector.
The United Kingdom's Department for Transport ("DfT") has announced that new regulations for rental e-scooters will come into force on 4 July 2020. The announcement follows an accelerated consultation into e-scooters, which was launched in May to support the government's £2 billion investment into green transportation initiatives. The new regulation will allow local authorities and devolved administrations to operate (or permit the operation of) e-scooter rental schemes. This is a significant expansion of the original proposal to run trials in four designated zones in 2021, and will allow the government to actively monitor the benefits of e-scooters as transport networks open up after the sustained period of lockdown caused by COVID-19.
Rules of the Road
On 30 June 2020, the DfT published guidance on the trials for e-scooter operators and local areas (the "Guidance"), which sets out the regulatory proposals and timetable for the trials.
In order to facilitate the trials, the DfT will amend existing regulations regarding the design, safety and use of e-scooters. The consequence of the proposed amendments is that e-scooters will be regulated in a manner which is broadly similar to regulations which apply to electrically assisted pedal bikes ("EPACs"). Much like EPACs, e-scooters will not be taxed, and will be excluded from vehicle registry and licencing requirements. E-scooters will also be able to use the same road space as EPACs and cycles, including cycle lanes and tracks, which represents a material change from the prior legislation. The key difference, however, is that, unlike EPACs, e-scooters will be classed as motor vehicles during the trial. E-scooter rental operators and riders will therefore need to be aware of three key legislative implications of this categorisation.
The first is the effect of the proposed definition for e-scooters in the applicable legislation. The legal designation of e-scooters as motor vehicles will be achieved through an amendment to the statutory definition contained in the Road Traffic Act 1988 ("RTA 1988"). The Guidance proposes a definition which includes a maximum weight of 55kg, an electric motor with a 500W power limit, and a maximum speed of 15.5mph, as well as safety features such as a power switch that defaults to being off. Three-wheeled scooters are excluded from the category entirely. Operators should ensure that their scooters meet these requirements in order to participate in the trial. The designation also means that, under RTA 1988, an e-scooter must have a valid motor vehicle insurance policy in place. The legal minimum requirement is that operators put in place third-party cover, and the Guidance specifies that trial bids should demonstrate that appropriate insurance is in place, in order to meet the DfT's bid assessment requirements. Whilst not legally required, the Guidance contemplates that operators may wish to procure further insurance (such as against theft and damage to the e-scooters), as well as personal insurance which could be provided to users on an optional basis.
The second legislative point to note is that an e-scooter rider must have a driving licence. The Guidance proposes amendments to the Motor Vehicles (Driving Licences) Regulations 1999, which will allow for holders of provisional licences (as well as full driving licences) to operate an e-scooter during the trials. Riders will not be subject to mandatory training, but it is important to note that the Guidance anticipates that local authorities may request that e-scooter operators provide training to riders.
The third notable change is that the DfT will be amending the Motor Cycles (Protective Helmets) Regulations 1998. This amendment will allow riders to use an e-scooter without the need for a helmet. Whilst this further opens up the accessibility of e-scooters, the Guidance again notes that this is subject to the terms agreed between local authorities and operators, and it recommends that helmets should be worn by riders in any case.
When will this start and who can operate them
Any local area of England, Scotland and Wales can apply to the DfT to participate in the trials. The DfT will assess the applications against the requirements prescribed in the Guidance and allocate trials to suitable areas at their discretion. The application process appears to put a premium on speed of delivery, with a light-touch contracting and procurement process deemed appropriate for many cases. The Guidance characterises the trials as a time-limited opportunity for areas and operators, and emphasises that, to take advantage of this period and generate a successful proposal, they must work together to learn how best to integrate and deliver the benefits of e-scooters, with aligned incentives and legal flexibility. Key areas of flexibility will include local authorities making changes to their procurement processes to fall within the timeline, the extent of rider safety training required, and fast action on cycle lane designation.
The trials will run for a 12-month period, commencing on the day that the e-scooters are made available to the public in the area. From a practical perspective, the DfT anticipates that the trials will start between 4 July and end of August 2020. The new regulations will also contain an option to extend the trials beyond this initial period. During the trial period data will be collected by the DfT, which will be used to develop future legislative changes.
The Road Ahead
The trials will compound the momentum which is building behind the micromobility sector. This momentum has two key drivers. The first is a situational one. COVID-19 has had a material effect on the transport sector, with public transport in particular stymied by restrictions aimed at curbing the spread of the virus as countries emerge from lockdown. With laws and guidance for public transport set to remain restrictive for the medium term, socially distanced alternatives such as e-scooters could provide a welcome option for consumers. The second driver is government policy. The DfT has been clear to characterise the trials as forming part of the government's overriding objective to move the national transport infrastructure towards green solutions, as well as ease burdens on strained public transport services. This follows the founding principle of the Future of Transport Regulatory Review, which was launched in March 2019. This new development suggests a long-term movement towards widespread consumer adoption of e-scooters, and the trials will be closely followed by the DfT in order to ensure that micromobility is given the correct legislative and practical support to thrive in a post-pandemic, green transportation infrastructure.
We will separately provide an update on our survey on micromobility in London entitled "Getting the City Back Into the City", which we launched last week. If you would like to join the conversation and participate in the survey, please click here.
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