Monday August 24, 2015
A website that connects passengers with small-plane pilots wants a federal court to let it return to the skies.
While Uber fights the taxi industry on the ground, a website that aims to bring ride-sharing to the skies is in a legal dogfight with federal regulators who want to clip its wings.
The site, Flytenow, is designed to allow passengers to hitch rides with private pilots while divvying up the costs — enabling travelers to avoid sitting in traffic or enduring airlines’ luggage fees and cramped seats. But the Federal Aviation Administration effectively shut down the service and a second flight-sharing site last summer, accusing them of dodging the extra requirements that apply to pilots who ferry passengers for pay.
Now the company is hoping a federal appeals court will prompt FAA to change course, in much the same way that Uber has battled taxi regulators around the world and Airbnb has fought against restrictions on short-term lodging. The case, set for a hearing Sept. 25, is just an example of the clashes that have emerged as Uber-like services invade more and more lines of business — including laundry, cooking, massage therapy, valet parking and at least two companies that function as Uber for helicopters.Flytenow’s business model is similar to Uber’s in that it addresses “a two-sided market that hasn’t traditionally been connected very well,” Flytenow co-founder Alan Guichard told POLITICO — in this case, hooking up travelers with the myriad pilots flying around with empty seats.
The pilots don’t charge for the service, aside from the passengers’ share of the fuel costs and other expenses. But Guichard said FAA is essentially arguing that a private pilot transforms into “American Airlines and Delta” when he or she lists a flight plan online so that passengers can tag along. “We’re saying that proposition is completely absurd,” he said.
In court papers, Justice Department attorneys portray the regulations as a matter of public safety. The rules “reflect in part the fact that it is difficult for members of the public to evaluate the safety qualifications of pilots they do not know, making it critical for the government to regulate stringently the qualifications of pilots providing transportation to the general public,” they wrote.
Flytenow and its sympathizers say the services offer an important lifeline for pilots dealing with the ballooning costs of flying, while letting passengers take short trips for relatively little. (A round-trip flight in a four-seat Cessna from the Boston suburbs to Martha’s Vineyard may cost $120 a person, the company says.)
Statistics from the General Aviation Manufacturers Association show that purchases of small planes cratered after the recession and never fully recovered, while fewer people are getting licensed to fly privately. “The absolute No. 1 reason is the cost,” said Steve Lewis, co-founder of a similar service called AirPooler.
Flight-sharing supporters also argue that the services are no different from the age-old practice of private pilots listing their planned trips on community bulletin boards, hoping to attract riders who can defray the costs — a practice the agency has previously endorsed.
“The only thing that has changed between activities that the FAA has expressly permitted for 50 years and activities that the FAA now says are prohibited is the … means of communication, and that is the Internet,” said Jon Riches, an attorney with the conservative Goldwater Institute who is representing Flytenow in a lawsuit the company filed in September.
But the Web casts a much broader net than a local flying club’s corkboard, as the FAA’s government lawyers note in their court filings. Anyone can register for membership on the site, they said, adding that there’s no sign the company has ever denied access to anyone. That means private pilots could reach a wider pool of prospective passengers than ever before.
Flytenow and AirPooler’s business models rely on their interpretation of an FAA expense-sharing rule, which provides an exception to the general ban on private pilots accepting money for flights. The rule allows the pilots to accept the passengers’ fair share of the flight costs, as long as the pilots are the ones deciding the itinerary. (Both companies also collect fees for the convenience: Flytenow takes in a flat $10 from passengers, while AirPooler holds back 20 percent of the pilot’s share.)
But the government sees the exception as geared toward pilots shuttling friends and acquaintances, in which the “passengers are more likely to know the pilots in question, providing at least some basis for evaluating the safety of accompanying the pilot on the flight,” the Justice Department lawyers wrote.
The FAA’s interpretation effectively renders the expense-sharing exception useless, said Rebecca MacPherson, a former agency assistant chief counsel who now represents AirPooler. She said she understands why the FAA is leery of allowing flight-sharing to go on unchecked in the digital age but says it could have chosen “to monitor for bad players” instead.
MacPherson also expressed doubts that many pilots will want to abuse the exception. “Why would I fly to some place I don’t want to go so I can get one-quarter of my fuel cost back?” she asked.
FAA laid out its interpretation in a letter to MacPherson last August, and Flytenow sued the agency the following month. AirPooler is not involved in the suit.
Some lawmakers say the debate is important enough that FAA should write a new rule on the issue, which would allow the affected interests to weigh in. A rule would also give private pilots greater certainty than a legal interpretation letter, Reps. Todd Rokita (R-Ind.), a pilot and member of the House General Aviation Caucus, and Joe Kennedy (D-Mass.) said in a letter to the agency in December.
AirPooler’s Lewis said the vast majority of his site’s members have used the service for flights under two hours. He estimated that half were touristy day trips to destinations like California’s Half Moon Bay or Catalina Island, while the rest were family- or business-focused excursions.
If the government really does not want to see ride-sharing expand to aviation, the FAA should explicitly say so in a regulation, Lewis said.
“Or they’ve just got to wake up to progress,” he said.