The only motor is in the front hub, operated by some sort of crank sensor.

As for what all is going on in the front wheel hub assembly, it's hard to know - the Daily News article claims to quote someone saying something that is either mechanically confused, or very alarming.

The only thing that seems actually clear at present is that someone in management or legal became concerned, as they seem to have pulled the e-bikes out of several other cities as well.