Flytenow, a start-up business that uses the Internet to connect private pilots with passengers wishing to share travel plans and flight expenses, sued the FAA for shutting the website down.
Flytenow expands on the trend that companies like Uber and Airbnb.com have popularized: Allowing consumers to connect directly with private individuals who have goods or services that they need, officials noted.
Flytenow passengers do not pay for tickets or for the pilot’s time, instead, they only share fuel and fee costs with the pilot.
This cost-sharing arrangement with private pilots and passengers has been allowed by the FAA since the 1960s. Pilots previously found people to cost-share with by word of mouth, phone, posting notes on bulletin boards in airports, by email, and various other means.
Flytenow simplified the process by allowing pilots to post a planned trip on a website to find people interested in sharing costs.
But the FAA determined earlier this year that the process of posting a planned trip on a website constituted advertising and that subjected the private pilots to the same regulations that pilots for a commercial airline like Delta would have to meet, so they forced Flytenow to shut down.
“This is a classic case of government overreaction to new technologies and innovative ideas. Instead of updating regulations to reflect the way Americans communicate today, the FAA is stifling innovation and silencing pilots who want to use the Internet to communicate their travel plans,” said Jon Riches, an attorney at the Goldwater Institute. “The FAA has essentially said that sharing flight expenses by posting a flyer on an airport bulletin board is okay, but sharing expenses by posting travel plans on the Internet is not.”
Flytenow attempted to work with the FAA to address the agency’s concerns about advertising. But the FAA couldn’t provide the company any guidance on ways to communicate that did not violate agency rules. When the FAA shut down Flytenow, the agency also said that the pilots were being compensated, even though the FAA itself has expressed said that expense sharing in any other context is not compensation, Flytenow officials noted.
The Goldwater Institute is representing Flytenow in its suit against the FAA. The Goldwater Institute is arguing that the FAA’s decision to shut down Flytenow violates the First Amendment and Due Process rights of the company, its owners and members, and that the agency’s rules are unconstitutionally vague because it cannot provide legally-required “fair warning” of what communication activities of private expense-sharing pilots are allowed or not.
The Goldwater Institute wants the FAA to update its regulations to allow private pilots to make cost-sharing arrangements via websites like Flytenow.com and to make allowances for other new innovations that will be developed in the future.
“All we’re asking is for the FAA to bring its regulations in line with the times so that new ideas in the aviation industry can take off,” said Riches.
Flytenow, Inc v. Federal Aviation Administration was filed in the U.S. Court of Appeals for the District of Columbia, often considered the nation’s second highest court. A successful outcome in this case could have wide-ranging implications for the broader “sharing economy,” Goldwater Institute officials noted.
David shoots holes in his own argument. “Holding out” is advertising the availability of indiscriminate transportation–transportation to a place the operator wouldn’t normally go. Compensation is not even required as the FAA has ruled that gaining flight time can be compensation. Advertising that I’m flying to Aspen in two weeks and would anyone like to come with me is not holding out. Advertising that my plane is available to go where you would like to go when you would like to go is holding out. Sharing expenses has always been fine. Think carpool vs. taxi.
Of course the FAA is pissing away hundreds of thousands of taxpayer dollars arguing that a 3 pound quadcopter is an aircraft and subject to 91.3 so given that logic and restraint have never been their strong suit, I too am less than optimistic.
PilotMike: Just because there is a common purpose does not mean that there is holding out. You are confusing two rules. Common purpose is set forth in CFR 61-113(c). Holding out is defined under common law and is a test for imposing 199 regulations.
The FAA’s interpretation of Holding Out is based on 61-113(c), Part 119, and case law, including cases that have been denied certiorari to the US Supreme Court.
The CFRs are clear that a private pilot cannot accept compensation. Pilots accepting compensation may do so only under the exceptions set out in CFR 61-113(c). Those involved in Common Carriage must comply with 119.
Common Carriage is a common law term. To determine whether a pilot is engaging in Common Carriage, one must look to four factors.
One of the four factors is was the pilot “holding out”. Holding out means advertising or otherwise presenting the pilot to the public at large that flight services for people or cargo are indiscriminately available. This is something that must be determined on a case by case basis.
Just because it must be determined on a case by case basis doesn’t mean it’s vague.
FlyteNow would have to show that the law would be vague in all of its applications. Hoffman Estates v. The Flipside, Hoffman Estates, Inc., 455 U.S. 489 (1982). I don’t think they can do that. Clearly, placing a newspaper ad for flying services is holding out.
“Advertising that I’m flying to Aspen in two weeks and would anyone like to come with me is not holding out.”
The FAA has said that it is.
I think the FAA will give us new clear rules. I hope they are rules that we find palatable.
I predict Flytenow will win and David and those who hold views like him will be mad as wet hens.
The rest of us will be celebrating a tiny little bit of freedom.
Haha! I will not be *angry* should Flytenow or other flight-share companies prevail. I just don’t see it happening. I don’t see any Constitutional issues here. The basis of the suit, as I understand it, is:
“the FAA’s decision to shut down Flytenow violates the First Amendment and Due Process rights of the company, its owners and members, and that the agency’s rules are unconstitutionally vague.”
I don’t see any due process issues. In fact, MacPherson is not an Administrative Law Judge Ruling fro the NTSB–it is a letter of interpretation from the chief counsel of the FAA. As such, it is not law but an indication of what the FAA would do in an enforcement action. It is also not an CFR. So where is the Due Process issue?
The NTSB usually does agree with the FAA Chief Counsel in the letters of interpretation (but not always). And you are wise to follow them as if they were regulation (which I would advise anyone to do). 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. Thus, I do think it is vague.
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.”
Well, Rich, FlyteNow didn’t win.
The FAA’s meddling in private affairs such as this in the manner which it has is typical of what happens when a government bureaucracy has become self serving and no longer serving the public as was the original intent. I agree completely with the logic behind the suit. The modern day method of communicating is no longer restricted to posting notes on a bulletin board or word of mouth but posting notes on a virtual electronic bulletin board and in an electronic mouth which can reach so many more people in a short amount of time. The FAA is so stuck in the mud it’s absurd and ridiculous and just plain self serving.
The same logic will soon become a cause celeb with respect to ADS-B out and the mandate from the FAA that it must absolutely be a prohibitively expensive “installed system” and never a comparatively cheap but equally functional portable system which if not available now (which I think it is) would soon be available if technology were allowed to provide an answer to such a need.
The more I read about ADS-B-out, the more obvious it is that this program is mainly about control, not safety or cost savings.
Due to the possibility of failure of the ADS-B-out installation in a particular aircraft, and the fact that it is unclear whether the feds can compel non-US airliners to equip with ADS-B-out, traditional ground radar will continue to monitor traffic using major airports. So, while the ADS-B-out position information is more accurate, it will not replace radar and there will be no overall cost savings or enhancement of air safety.
OTOH, experts point out that certified, installed ADS-B-out systems will broadcast a discrete ID code (NOT just a user-changeable squawk as in current X-ponders) at all times. Such ID code has already been assigned to all US-registered aircraft by the FAA and will be programmed into a particular ADS-B-out system’s software at the time of a certified installation.
Why? As a means of monitoring the activities of all ADS-B-out equipped aircraft in the NAS. This would include serving as the basis for sending invoices for any future fees attached to use of ATC services, ensuring payment of fines for airspace “busts” and so on. As it uses satellite systems (in part), it will cover airspace where radar does not reach. In other words, it will enable big brother to know what your plane is doing at all times and exactly who to send the bill or ticket to.
Homeland Security already has NAS monitoring centers where computers generate “possible illegal activity” alerts which have been one basis for the much-criticized CBP/DEA armed “ramp checks”. ADS-B-out will simply give the computers more detailed information to work with. The desired level of monitoring cannot be achieved if the FAA allows portable units which may legally be used by more than one aircraft.
Once the feds’ true motives are revealed, the proposed rules suddenly become easier to understand.
I don’t see this (Flight-share companies) as the FAA meddling in private affairs. The FAA has a long track record of regulating pilots as concerns compensation and flying for hire (see my post above).
ADS-B is a totally unrelated issue, and it has more to do with the FAA’s focus on big airlines, charter companies, and military. The FAA forgets about us GA pilots. There needs to be a practical solution to the issue, and a portable device would fit that bill.
The FAA is about 50 years behind in technology and many requirements relating to equipment go back to the earliest days of flight. Look at Foreflight and their new Synthetic Vision option. What is possible today with just an iPad is incredible. The Federal Government is not flexible enough to keep up.
Glad to see this suit filed. It’s really all about individual freedoms. The FAA doesn’t “protect” the public by hiding behind the word “safety” in many regulatory areas and this is one of those areas.
From the article: “Pilots previously found people to cost-share with by word of mouth, phone, posting notes on bulletin boards in airports, by email, and various other means.”
The FAA has not said these activities are permissible. They may or may not be, on a case by case basis. The issue is “holding out” or advertising a flying service. Private pilots can’t do that. Only commercial pilots can do that and they (or their employers) must have commercial operator certificate as well.
This is a safety and training concern. If you are paying for rides with someone you don’t know, the pilot and the aircraft need to meet certain standards (health, proficiency, mechanical, and safety). The law has developed over a long period of time to the current status and evolved due to prior accidents and deaths.
Although I think Flytenow is absolutely correct, I’m not terribly confident that the suit can be won.
The website is still up, but if you sign-up, there aren’t any flights listed. I’m not sure if that’s because they “shut down”, or if no one bothers because of the FAA ruling.
One approach would be to modify the website to avoid any collection of money, and just warn users that they might be violating the law if they share expenses. Of course users would still exchange money in person, just like they do today, and the FAA wouldn’t really be able to stop it. I realize that eliminates the possibility of Flytenow building a business. However, it could create demand. Uber and Airbnb run afoul of laws in many places, but because the demand is so high, they have leverage to play in a grey area where they essentially ignore the law. Flytenow could attempt this strategy. Whether this is ethical or not is a whole different matter.