Hey all,
Matt from Flytenow here.
We analyzed their response, it's quite the weak argument and agree it's confusing.
It certainly harms all pilots looking to share costs, regardless of whether it's through social media or not.
Here is our response: http://blog.flytenow.com/missed-approach-faa-says-flytenow-go-around
Here is your response and my comments:
flytenow-blog said:
On August 15, 2014, six months after our initial request for an official ruling concerning our expense-sharing platform, the FAA responded. Regrettably, the FAA’s letter fails to answer the only two questions it raises. What is clear, however, is that the FAA arbitrarily grounded planesharing, for now. The ruling declares any form of expense-sharing to be compensation, regardless of whether it originates on a ridesharing platform or not.
Before we go any further, here is the FAA’s traditional legal framework:
The “Common Carriage” Rule: Private pilots cannot hold out to the public a willingness to transport persons for “compensation.”[1]
The Exception: The sharing of expenses is an exception to “compensation.”[2]
The Common Purpose Test: The expense-sharing exception only applies if the pilot and passenger share a common purpose in the destination of the flight, i.e., the pilot and passengers each have a reason for traveling to the destination.[3][4]
Based on this legal framework, pilots have been sharing expenses with their passengers for decades. It has been common practice for private pilots to post their flights on local airport bulletin boards.
This may be common practice (though I do not see it at my local FBO), but it is arguably "holding out" as the FAA has indicated.
Haberkorn
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
This includes the public at large or a segment of the public, like Facebook friends. Asking a friend to go on a trip, then, may not be telling a segment of the public that transportation services are indiscriminately available.
[An advertisement] may still be considered holding out if it expresses a willingness to provide transportation for all within this class or segment to the extent of its capacity [emphasis in the original].
See the Article,
Come Fly with Me, in the Sept/OCt 2010 issue of FAA Safety Briefing, mentioned in Haberkorn.
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.
flytenow-blog said:
Anyone walking by who saw the post and had a common purpose at the destination could contact the pilot, join his or her flight, and share the costs.
As such, the common purpose test ensures that a pilot’s motivation for sharing expenses while flying is not rooted in compensation. Rather, it ensures that a pilot who takes advantage of the expense-sharing exception is engaged in the genuine sharing of expenses because the pilot and passenger each have separate business at the destination. This is how pilots have been able to legally defray their expenses for decades.
The Flytenow platform simply applied this framework to the technological age. We allowed pilots to post where they were going, and enthusiasts with a common purpose in the destination to join them and split the costs – same as it’s always been. So what’s changed? Simply put, the FAA chose not to apply the common purpose test and ruled all expense-sharing to be compensation.
As the MacPherson JonesDay letter makes clear, if there is "holding out", you do not get to the 61.113 rule, which is an exception only to the ability of a private pilot to receive compensation for a flight under limited circumstances. One thing that is not permitted in that instance is "holding out". So it is not appropriate to even delve into the issue of "common purpose", which is a 61.113 issue.
flytenow-blog said:
The ruling summarily concludes that pilots using the platform are engaged in compensation, and thus, “common carriage”.
Nowhere does the letter apply the “common purpose” test to any ridesharing platform flight(s), which is the single most important factor in determining whether compensation exists. "For this reason, the FAA has required a private pilot to have a common purpose with his or her passengers and must have his or her own reason for traveling to the destination.”
What’s most troubling is that the ruling appears to have swallowed the common purpose test with the following enigma:
"Based on the fact that the FAA views expense-sharing as compensation for which an exception is necessary for private pilots, the issue of compensation is not in doubt."
Translation: Because expense-sharing is an exception to compensation, it is compensation. Put another way, the FAA claims that an exception includes what it excludes. This logic swallows the expense-sharing exception and deems all expense-sharing to be compensation. Prior to this statement, the common purpose test determined whether expense-sharing was or was not compensation.
No, it did not. The FAA said expense sharing is compensation. Period. 61.113(c) does not say compensation is not compensation if there is a common purpose. It states that limited expense sharing (compensation) is permissible in a limited situation. The fact that is it compensation is not negated.
It is allowed if there is a common purpose--a narrow exception to the rule that a private pilot may not accept compensation for flying persons or property. But if there is holding out you don't even get to the 61.113(c) exception.
The FAA is saying that as to the common carriage test for compensation, you have admitted that there is compensation. Is it allowable under 61.113(c)? No, because there is holding out.
None of this is new law or a new position for the FAA.
flytenow-blog said:
Most pilots know that “holding out” is defined very broadly, so it is no surprise that the FAA did not delve into the issue beyond the general statement that posting a flight to a website is “holding out.” The problem is that “holding out” only applies if compensation occurs. Without compensation, “holding out” does not apply because §119(k) says “no person may advertise or otherwise offer to perform an operation subject to this part” What’s this part? See the Applicability section of Part 119. “Holding out” applies to “an air carrier or commercial operator, or both, in air commerce.” Again, the issue is compensation.
14 C.F.R. 119.1 specifies what is applicable under the chapter. It is:
§119.1 Applicability.
(a) This part applies to each person operating or intending to operate civil aircraft—
(1) As an air carrier or commercial operator, or both, in air commerce; or
(2) When common carriage is not involved, in operations of U.S.-registered civil airplanes with a seat configuration of 20 or more passengers, or a maximum payload capacity of 6,000 pounds or more.
. . .
(d) This part does not govern operations conducted under part 91, subpart K (when common carriage is not involved) nor does it govern operations conducted under part 129, 133, 137, or 139 of this chapter.
Under 119.1(d), then, common carriage
is the issue, then, to determine whether part 91 would even apply, and one test of common carriage is holding out. The FAA said that posting the availability of the flight to a flight-share site is holding out.
The flight-sharing app or website is not as restrictive as the sub-set of the public constituted by my Facebook friends, yet the FAA said in Haberkorn that advertising a flight I am planning on taking to such a subset of the public may constitute holding out.
flytenow-blog said:
In the face of an unprecedented and impending pilot shortage, and Private Aviation operations at one of its lowest points in history, we will do everything we can to defend your private pilot privileges.
and I'd love to see the FAA bend on this just from the standpoint of promoting GA, and I wish you well in your endeavors.
flytenow-blog said:
Flytenow was built by pilots for pilots. We are keeping the platform up and running, but removing all forms of expense-sharing. This means that a pilot will no longer be able to use Flytenow to share expenses, but may still find others to fly with. Based on the ruling, this means that flights cannot possibly be seen as “common carriage.”
Now more than ever, innovation and regulation intersect due to new and exciting technologies, and regulators are almost always too slow to adapt. This has been true since the advent of the automobile, when regulators passed laws banning “the running of horseless carriages,” to today’s regulatory monopolies that companies such as Uber and Airbnb have disrupted.
If you are a pilot, an aviation enthusiast, or are interested in the development of ridesharing in aviation, please sign up for updates by creating an account at
www.flytenow.com or subscribing to this blog.
The Flytenow Team