Hire Scheme Joint Arrangement Requirements
This page outlines the Hire Scheme Joint Arrangement Requirements.
1.1. Joint arrangement requirements
1.2. Definition of commercially operated public share scheme
1.3. Arrangement format and requirements
1.4. Example model agreements
1.5. Operating areas and entry into non-participating adjoining council areas
1.1 Joint arrangement requirements
Under Part 7C of the Road Safety Act 1986 (the Act), commercially operated public hire schemes for bicycles, e‑bikes or e-scooters can only operate if the hire provider has a joint arrangement with the local council to provide hire devices within a municipal area.1 These provisions were introduced in 2023 through the Transport Legislation Amendment Act 2023.
This requirement enables local governments to manage issues specific to micromobility share schemes and their impacts on amenity and accessibility, and enables local governments to have determination over whether to allow share schemes to operate in their municipality.
The requirement is in place to prevent operators from deploying shared micromobility devices in local government areas (LGAs) without council permission (as occurred with oBike in Melbourne in 2017), and provides an avenue for councils to set standards and conditions for use of hire devices in their LGA (i.e. insurance requirements, the number of devices allowed, parking requirements and amenity management plans etc.).
Under Victorian roads rules and regulations, all e-scooters and e-scooter riders are subject to specific rules, including speed limits, prohibition on footpath riding and drunk/drug driving restrictions. In addition to complying with these general State regulatory parameters, it is expected that commercial operators will be required to comply with permit and/or contractual conditions imposed by participating councils.
If a share scheme provider deploys hire devices in a municipality without the council’s permission the operator is subject to significant penalties.
1.2 Definition of commercially operated public share scheme
A commercially operated public share scheme is when a micromobility device – specifically either a bicycle, an electrically power-assisted bicycle (e-bike), or an electric scooter (e‑scooter) (or other “relevant vehicle” type that the government may wish to declare) 2 is:
- made available for hire; and
- hired, from wherever they are located, through a wholly or partly automated electronic system; and
- not required to be returned, after the period of hire ends, to private premises.
Examples of e-scooter share schemes include the Lime (green) and Neuron (orange) e‑scooters made available in metropolitan Melbourne during the Victorian Government’s e‑scooter trial throughout 2022, 2023 and early 2024. Examples of bicycle sharing schemes include the Lime e-bikes available in metropolitan Melbourne or Neuron e-bikes available in Frankston.
Examples of hire businesses which are not considered public hire sharing schemes (and therefore not covered by the share scheme requirements in the Act) include:
- hiring out devices from a retail outlet which are returned to that same location;
- hiring out devices from one location in a chain of businesses where the device must be returned to another location in that chain of businesses;
- hiring out devices at one end of a bike trail which must be returned to a location at the other end of the bike trail; and
- apps for hiring cars or other motor vehicles for short-term use (cars are not a “relevant vehicle”).
1.3 Arrangement format and requirements
Councils and operators need to have an agreement in order for operators to provide short-term micromobility hire services to the public in a municipality. Importantly, this requirement for an agreement gives councils the ability to set expectations and service standards should they wish to allow share scheme operations.
Agreements will also typically set conditions for operations (e.g. permitted time of operation, management of parking and amenity – see Section 3: Guidance and Best Practice Advice for Hire Schemes).
While there are currently no specific requirements in the Act or in regulations for what this agreement must contain, 3 the State strongly recommends that they include a number of requirements for operators, outlined in Section 2: Expected Conditions for Hire Scheme Operation and Management. For example, that all hire scheme operations have an appropriate level of insurance coverage to provide a financial safeguard for riders and third parties in the case of accident and injury.
1.4 Example model agreements
The management of the arrangement between a council and a hire operator and the format and detail of this arrangement is up to the council to manage. While there are no universally agreed standards for the management of share schemes, and different council areas will have different service standards and expectations, many elements that shape the management of public hire schemes share similar characteristics. The aim of this document is to highlight some of those key elements and guide councils through the set-up phase of engaging and managing a micromobility share scheme operator. To supplement this guidance, the Department of Transport and Planning can also be contacted for assistance.
Share schemes in other local government areas may also provide a model to guide councils in their planning. As an example of an existing share scheme services contract, the Melbourne metropolitan councils’ Shared E‑scooter Services Trial Agreement is available to view on the Melbourne City Council’s website. https://www.melbourne.vic.gov.au/parking-and-transport/Pages/e-scooters.aspx
1.5 Operating areas and entry into non-participating adjoining council areas
In order to have share scheme devices made available for hire from a location, the Act requires that the hire operator have an agreement with that locality’s municipal authority (i.e. the local government). Made available for hire means that it is not illegal for somebody to ride a shared scheme device into an LGA which doesn’t have agreement with the hire operator. It is, however, illegal for that device to subsequently be made available for hire from that location because it is not within the participating council’s area.
This distinction is in place to ensure share scheme operators (and not riders) are responsible for ensuring hire devices are only available for hire and being used in LGAs that want them and agree to the operation of the devices in their local area.
The hire provider therefore has an incentive to use mechanisms to prevent use outside of agreed boundaries from occurring in the first place, or else the onus is on the operator to move hire devices back into the participating LGA before they can be made available for hire again. This can be achieved relatively easily by commercial operators through geofencing technology to prevent trips being ended outside of participating LGAs.
The onus to prevent public hire devices from being abandoned outside participating LGAs is on the operator to manage. For powered devices, including e-scooters and e-bikes, the operator may wish to use geofencing technology to prevent these devices from exiting the authorising council’s boundary altogether (for example, by gradual power shutdown) to reduce the risk of those devices being left outside the participating LGA.
While DTP is not currently aware of geofencing technology to restrict the operation of pedal-only bicycles to specific geographical locations, geofencing can be used when the rider of a pedal-only bicycle attempts to end their trip.
Operators may wish to use incentives or disincentives (such as financial penalties) if use of a device is not ended within the authorising council’s boundary.
1 These legislated changes to the RSA are yet to be proclaimed, and will be proclaimed following the conclusion of the e‑scooter trial.
2 If in the future an additional type of vehicle (that is not a motor vehicle) is used in share schemes that should be regulated in the same way, that can be prescribed as a new “relevant vehicle” under the regulations.
3 Apart from that the agreement must make provision for or with respect to the relevant vehicles, or classes of relevant vehicle, that are to be made available for hire under the scheme.