Sharing economies have been around long before companies like Uber and AirBnB figured out how to take the idea digital and thereby monopolize entire peer-to-peer networks. Historically, the private aviation community is one of the groups which is most familiar with the principles of a pre-Uber sharing economy, due in large part to the huge costs associated with purchasing, maintaining and operating a noncommercial aircraft.
According to the FAA and a recent court ruling however, taking this well established flight-sharing network online is totally illegal.
In the days before the internet, the private aviation community's robust ride-sharing tradition was largely facilitated by bulletin boards and word of mouth. In an effort to bring the private aviation community in step with the changing times, a Boston-based startup called Flytenow created an Uber-esque flight-sharing service connecting private pilots with passengers in early 2014. Soon after their launch the FAA declared their activities to at odds with aviation regulations, and the two organizations have been locked in a legal battle ever since. The battle may have finally come to an end on Friday however, with the issuance of an appeals court ruling that may shut the startup down for good.
The way Flytenow works is relatively straightforward. It is essentially an online message board where private pilots post their flight plans and passengers (deemed "flight enthusiasts" by the company) can opt to hitch a ride if they are headed in the same direction. The crucial difference between this and buying a ticket on a commercial airliner is that the passenger cannot compensate the pilot for their service. Rather, the passenger is only splitting the costs associated with the flight with the pilot.
According to the FAA, this puts Flytenow at odds with the Federal Aviation Act of 1958 and other FAA regulations, which require pilots who are being compensated for their services to operate with a commercial license. As interpreted by the FAA, Flytenow's service turns the private pilots operating through their service into "common carriers," which would require them to obtain a commercial license.
As Flytenow argued in their lengthy case against the FAA, pilots making use of their service do not thereby become common carriers. As the company detailed on its blog, common law dictates that an organization becomes a common carrier when it exists to make a profit. Since pilots operating through Flytenow are not turning a profit, but only splitting the costs of flight with their passengers, to label them as common carriers goes against the definition of the term as it is commonly understood.
Moreover, Flytenow argued that expense-splitting between private pilots and passengers is a long standing tradition in the aviation community. The only difference between Flytenow and expense-splitting pre-Flytenow is the breadth of the audience that can be reached through the online service.
"It's OK for pilots to post a written notice at an airport or a college campus with 10,000 students, but if they post the same message online, the FAA says no. Where do you draw the line?" Matt Voska, a private pilot and a co-founder of Flytenow, told the Los Angeles Times. "What we are doing is permissible."
Unfortunately for Voska and the rest of the Flytenow founders, the U.S. Court of Appeals for the District of Columbia Circuit didn't agree. The appeals court sided with the FAA and decided that posting to Flytenow constituted a form of advertising and expense-splitting was a form of compensation, thus placing private pilots operating through Flytenow in league with commercial pilots and their corresponding regulations.
For now, the decision means that Flytenow will no longer be allowed to facilitate ride sharing between private pilots and passengers, although Flytenow co-founder Alan Guichard said the company is still considering an appeal on the ruling.