Lime allowed unsafe scooters to be used in Brisbane: ACCC

Lime misrepresented that its new scooters were safe to use as it continued to allow them to be ridden on footpaths around Brisbane, the Australian Competition and Consumer Commission has found.

In a decision handed down by the ACCC on Wednesday, Lime accepted a court-enforceable undertaking to address the commission's concerns.

Lime has admitted to not reporting serious injuries sustained by some users of its scooters.Credit: Albert Perez/AAP

In certain circumstances, the ACCC found, Lime’s Gen 2 e-scooters would apply excessive brake force to the front wheel, causing it to suddenly stop.

This caused riders to suffer serious injuries, including broken bones, damaged teeth, cuts and abrasions.

ACCC commissioner Sarah Court said misrepresenting the safety of a product could have serious consequences for its users.

"Businesses must disclose known issues so that consumers can take extra precautions if they still choose to use the products," she said.

Lime scooters in the company's Brisbane warehouse.Credit: Attlia Csaszar

The ACCC was also concerned Lime failed to comply with mandatory reporting requirements on at least 50 occasions for injuries arising from its scooters in Australia and overseas.

"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 about the firmware updates the company applied to its scooters in February and March 2019 that specifically fixed the safety issue, as required by product safety laws.

Ms Court said notifying the government of incidents and actions taken to address a product's safety hazard was vital.

"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," she said.

Lime acknowledged its conduct was likely to have contravened Australian Consumer Law, and it admitted that each time it failed to report a serious injury, it breached its Australian Consumer Law reporting obligations.

Lime spokesman Mitchell Price said the company remained committed to Australia, particularly Brisbane.

"We are a young company. While we don't always get it right, we learn fast," he said.

"We have agreed to the terms to demonstrate Lime is a responsible company."

Mr Price said the issue of the misrepresentation of the product was resolved in March last year.

"Today's decision demonstrates the undertaking we’ve made will reform the industry," he said on Wednesday.

Lime suspended its e-scooter operations in Australia in March due to the COVID-19 pandemic and the public health measures imposed by governments.

Should it recommence its operations here, it has undertaken to supply only Gen 3 or later models for hire, to address any safety issues or defects affecting its scooters, and to implement a comprehensive compliance program.

Mr Price said Lime hoped to resume its services in Brisbane by the end of next month.