Absolutely would NEVER enter into this arrangement.
Liability varies from state to state and you can surely bet the possibility of being dragged into a mess, even from the most simple fall by a renter OR if they hit and ran over a child on your bike. Plus you're an individual that some potential plaintiff with a pitbull lawyer could wipe you out. You agreed and contracted - regardless. Do you realize the amount of potential legal defense and expense you would need? Even simple appearance and court filing fees should make you think twice.
Should you think collecting the occasional measley $25 - $50 is worth the risk and a great business plan, you might as well protect your azz, register as an LLC or Inc. That being and only then can understand a volume based profit center for some resort or beach boardwalk entering in a contract with this rental operation.
As individual never exchange money for the rental! One would be far better and safer off by loaning a bike and taking zero dollars OR tell a potential who wants to rent a bike, direct them to a LBS or perhaps hit Wallymart and purchase a $125 bike. When done with it, have them give it away or leave at the curb.