Flytenow modifies business model in face of FAA ruling
August 27, 2014 by Ben Sclair
Private pilots have been legally sharing the expenses of flights for decades. So when ride-sharing website Flytenow co-founders Alan Guichard and Matt Voska set up shop to make it easier for pilots and passengers to connect for aviation adventures, they sought an interpretation of the expense-sharing rules and exceptions from the FAA to make sure all was OK.
What they received was a “huge shock,” said Guichard.
They feel the ruling focused solely on money, without taking into account the “common purpose” of a pilot and passenger getting together to fly somewhere.
Flytenow will petition the Washington D.C. district court to review the ruling. Paperwork was to be filed sometime this week.
Until then, Guichard and Voska changed the business model of the site to allow pilots and passenger to still find one another but no money is allowed to change hands.
So much for bringing the airport FBO bulletin board into the 21st century. Stay tuned.
For more information: flytenow.com
My thoughts:
This wasn’t a “ruling”. It was a letter of interpretation from the FAA chief counsel indicating how the FAA would likely rule in an enforcement action. Letters of interpretation have been overturned by the NTSB and Federal Courts before, but it is not common. This letter was based on years of consistent application of the regulations.
The biggest problem with the regulations–the Code of Federal Regulations (CFRs) applying to aviation–is that nowhere do they set forth the definition of common carriage, which is a common law notion. Because this is common carriage (1. Holding out 2. to transport persons or property 3. from one place to another 4. for compensation), the 61.113 exception does not apply. The CFRs (notably, 61.113) do not make any mention of this idea of “common purpose” either. That is from prior letters of interpretation and NTSB cases, etc.
The CFRs need to be amended to put into the regulations these rules that pilots are to beheld accountable to. It is not realistic to expect private pilots to wade through mountains of letters and NTSB/Federal court decisions to discover what they are and are not permitted to do, especially in an area that is of a fairly high concern to so many. In this process, if the flight-share companies can get clarification that what they are doing is OK, then all the better. But we all need clear rules set out in the CFRs for us all to follow without reference to letters that are not listed or included with the CFRs.
As to the idea that all the flight share companies are doing is taking the airport or FBO bulletin board to the internet, I think the FAA has said that a bulletin board may be considered holding out. I have never seen posts like this on a bulletin board at my airport, but it seems like the practice does go on with the FAA turning a blind eye unless the pilot is blatantly acting as an illicit charter company.
See Haberkorn and the Article, Come Fly with Me, in the Sept/Oct 2010 issue of FAA Safety Briefing, mentioned in Haberkorn:
Haberkorn Letter:
“The holding out can be accomplished by any “means which communicates to the public that a transportation service is indiscriminately available” . . . There may also be a holding out without advertising, where a reputation to serve all is sufficient to constitute an offer to carry all customers. Whether or not the holding generates little success is not a factor ”
Come Fly with Me, in the Sept/Oct 2010 issue of FAA Safety Briefing:
“This doesn’t mean that you can’t ask people to fly with you and share some of the costs, but the sole purpose of your flight can’t be just to transport your passengers from one point to another. Asking your flying buddies if they want to split the costs of flying to Oshkosh with you and flying with friends to that resort on the coast you’re all going to share and sharing the flying costs—those would be okay. However, sharing expenses with a passenger on a flight to a place you would not otherwise be flying to would be a problem.”
“Hold the Line on Holding Out
“Holding out” can be as complex as publishing a flight schedule for a major airline or as simple as posting a notice on an FBO bulletin board (or the Internet) telling everyone you’re the one who will fly them to that prime vacation resort and make their dreams come true. Many FAA inspectors also like to fly for pleasure, and they read those bulletin boards, too. They might not be too happy with your advertisement for Old Bessie’s “charter service” when they find out you don’t have a part 135 certificate, but at least they won’t take you to task for promising to make your prospective client’s dreams come true.
Many pilots believe that they can easily avoid the compensation or hire restrictions of the regulations by making other arrangements. The FAA, however, interprets “compensation” very broadly. For example, the FAA has long held that logging flight time for the conduct of a flight is compensation. Most of us, and especially those of us seeking that coveted left seat at a major air carrier, know how valuable flight time can be. So, if someone requests that you use your superior piloting skills to take them to that resort of their choice and you decline any monetary payment, but still log that flight time while not paying the costs of operating the aircraft, you’ve received compensation.
Goodwill obtained from providing a flight has also been determined to be compensation. Everyone knows how valuable a favorable news article or celebrity endorsement can be. Bartering can be considered compensation, too. You may want to think twice before you take someone flying in exchange for spending a weekend at their beach house."
