Re: Hi From SF Bay Area!
I cant speak for Palo Alto, however I see them all the time here in Santa Cruz and San Jose. Here is the law as I know it here in California:
# here are two types of motorized bicycles, defined in the California Vehicle Code (VC) Sections 406(a) and 406(b).
# Section 406(a) VC refers to a moped or motorized bicycle as any two or three wheeled device having fully operative pedals for propulsion by human power, or having no pedals if powered solely by electrical energy, has an automatic transmission, and a motor which produces less than 2 gross brake horespower and is capable of propelling the device at a maximum speed of not more than 30 miles per hour on level ground.
# Section 406(b) VC refers to a motorized bicycle as a device that has fully operative pedals for propulsion by human power and has an electric motor that:
* Has a power output of not more than 1,000 watts;
* Is incapable of propelling the device at a speed of more than 20 miles per hour on level ground; and
* Is incapable of further increasing the speed of the device when human power is used to propel the motorized bicycle faster than 20 miles per hour.
This is from the CHP website (sorry I can post the link)
As long as you keep them in the bike lane and observe the bicycle laws (when the cops are around) I don't think you should have any problems.