Yes, this impound yard could be found to be breaking the law, but it may not come to that. This has only worked for him so far because this is a novel area of law, where very little in the way of precedent has been laid down.
This type of imaginative law-bending is very typical of people in the impound and scrap business.
But the other party is no white knight.
The no-lose scenario
It appears to me that the true goal of this enterprise is to resell these rather sturdy scooters on the used market. It works in his favor to acquire thousands of them, so he can spread the engineering cost of breaking the locking mechanism.
I suspect this started out as an impound/ransom scheme, on the logic that it's cheaper for the scooter companies to buyback their scooter than pay China for a new one; however the scooter companies aren't cooperating, and in fact seem to be willing to feed unlimited replacement scooters into the market. They seem to be gambling that he'll lose big.
He knew at the start this would either be one of the two above paths, or, the scooter companies would pull out of San Diego entirely. He is publicly in favor of the latter! Which weakens his legal position, because it makes this look like a personal crusade; and he has contrived a situation where he wins in every case. He collects impound fees, or gets free scooters, or personally kills a business model that offends him. Judges tend to be especially skeptical of those.
Left-handed ways of winning
The law could go his way. But he may also be gambling that the scooter companies will fold up, and he would be able to settle out on the scooters for pennies on the dollar with the bankruptcy trustee. There's precedent for mass scooter business failure. And the trustee would not want lengthy "make new law" litigation, and would cheerfully take a cash settlement. He sure won't want the scooters back.
But in the meantime, he's thick into a public relations campaign. Because of the unwritten and untested law in this area, he's trying to motivate legislators into writing statute favorable to him, or even prejudice juries into thinking "That's just how society works". Hence the press coverage you are seeing. He's definitely having an influence; the city of San Diego endorsed his actions by imitation at Comic Con.
Problems with his approach
As discussed, he's rigged this situation so wildly in his favor that it will bear extreme scrutiny from judges. And when people do things this imaginative, they often get blind-sided by a legal issue they didn't see coming.
This person will have a big problem with mitigation. Everyone has a duty to mitigate (reduce) the other person's damages. That is his blind-side. Consider mitigation of an illegally parked automobile.
Pure mitigation would say "move it to the nearest legal parking spot". Couple problems with this. #1 when I return, I won't know where the car is, and will presume it stolen. This will cause me to abandon it in your new location, where it will be vandalized. And #2, cars can't be moved by hand; they need a tow, and those require $30-50 of net cost to the tower. Merely sending a towing bill to the vehicle registration address isn't likely to be collectible. For both reasons, a specific written law authorizes impounding for cars.
Here, this rationale falls apart.
- The companies are (by nature) highly capitalized and eminently collectible, so "impound to assure payment" is ridiculous.
- "so the owner knows where it is" also doesn't apply to scooter shares, since any safe public location will do (given the business model), and the units have GPS trackers and the companies have armies of tenders.
- "Too big for a human to move" is also inapplicable. As for inability/business, mitigation requires you do the easiest/cheapest thing that'll get the job done. It prohibits swerving out of your way to use a very expensive option out of spite, which is the clear motivation of the shopkeepers.
The shopkeepers would already be on the hook for the difference between this guy's impound fees and 50 cents. However, because their motivations are transparent, I see where they have no defense at all.
Also, they are circumventing the official system
Even moreso, the scooter companies already have a system in place for doing what these impounders are doing. They have an army of people who recover, reposition and charge scooters. This is crowdstaffed, and anyone can do it -- the impounders already could have joined that program, and be paid the normal way.
So it's not like the impounders are filling a need, which is what they are claiming in their press. They are circumventing the existing program, and replacing it with their own much more expensive program - hence words like "ransom" and "extortion".
What keeps you or I from doing the very same thing? The only difference is we don't have a license to impound cars.
Also against the impounders is their "distributed yards" in various business' parking lots, which obscures who is in possession of the unit (the scooters have GPS/radio onboard). The steel container shell means it can't get radio signals out at all, which looks like concealment.
The bottom line is that this looks, walks and quacks like a speculative venture to steal scooters on a large scale or commit extortion, because it does not look like a bona-fide attempt to manage the problem of abandoned scooters.
Judges certainly do not like contrived situations that exist to create inflated service fees, as we have seen in Righthaven, Prenda, Molsky and numerous other harassment lawsuits.
Possible defenses
First, the scooter companies could alter the EULA so that if you take a scooter to private property, you are renting the scooter, and make that EULA stick to anyone who does so. That adds a financial peril to the situation and gives the scooter companies a basis to go on the offensive.
Second, remember the duty to mitigate? The owner has it, and the scooter company could help them by adding a button to the control panel marked "Remove from my private property", with an indicator confirming the company received the message (even better: ETA) or "please move to better cell reception". This would salt the earth even further for any legal argument in favor of would-be impounders.
That's not to say it's required; it's still easy for a business owner to push a scooter out to the curb. And if it's not, because the scooter are a constant nuisance, remember: the scooter companies pay their crowd-staff to collect scooters. A business could arrange with a collector to visit frequently, or keep a special eye on their business on the app -- and the scooter company would pay the freight on that.
Lastly, the scooter companies could do what rental car companies have been doing for decades -- pass through any legal consequences to the renter. They know who last rented the scooter, where they left it, and when; pass the impound fee through. Now, the impounder is no longer a folk hero fighting clueless outside companies. Now he's extorting his own town's citizens, and the tide will go against him in the city council meeting.
