Our nation’s general aviation industry is dying and our innovation is its last hope. The Federal Aviation Administration (FAA) defines general aviation (GA) as non-scheduled aircraft operations. Most non-aviators believe that GA is simply light airplane operations, but the reality is more complex, and crucial to the future of transport. GA performs three critical functions: it serves as the cradle of future airline transport pilots, acts as a laboratory where the most advanced aircraft are built, and provides a lifestyle filled with passion and wonder that supports economies throughout the United States.

Since 1980, the cost of aviation fuel has increased over 1200%. These rising costs have made it increasingly difficult for people to enter aviation and unsurprisingly the number of certificated pilots has dropped over 30% since that time. Today, we’re facing a major pilot shortage.

A strong general aviation industry doesn’t just foster future pilots, it also supports local economies and preserves our nation's most impressive resource of integrated airports. The United States has the most airports of any country by far; 13,513, representing a third of all the airports in the world. Sadly, however, these airports are closing at alarming rates and the jobs that go with them, from restaurants, management staff, aviation services, and air traffic controllers are disappearing.

We can save GA and solve these problems by applying our new innovation to an age-old general aviation practice.

For decades, private pilots have been legally sharing their flying expenses with their passengers. For pilots, it's a crucial method of financing a passion for flying, and for passengers, it's an alternative way to reach a destination or experience flying in a private plane. To be clear, this is not “Uber for the skies” and there is no profit opportunity, rather, it’s pilots splitting the fuel costs with their passengers.

Before the advent of the internet and social media, pilots and passengers met via physical bulletin boards at local airports. Given the limited medium of cork boards, the practice was limited and sporadic. In 2013, we founded, Flytenow, an internet flight-sharing startup offering an online bulletin board to facilitate cost-sharing arrangements. By showing a pilot’s qualifications, confirming them with the FAA, and enabling both parties to connect via social media and direct messaging, we created an efficient, safe and consistent method of decreasing aircraft ownership and operating costs by up to 75%.

That was, until the FAA ruled in mid-2014 that any pilot using the internet to publicly arrange cost-sharing flights had to comply with the same regulations applicable to the airlines. With that, flight sharing in the US came to an abrupt stop, and general aviation continued its downward trend.

On the back of our initial success, companies popped up all over Europe to offer the same service and while the FAA shut down online flight sharing in the US, their European counterpart, the European Aviation Safety Agency, embraced it. Today, online flight-sharing in Europe is on track to do 60,000 flights per year and has been so successful they have even expanded it to allow more types of aircrafts. Watching our idea thrive elsewhere instead of the birthplace of aviation is one of the hardest things we’ve had to endure as pilots and entrepreneurs.

So, we committed to working with Congress to pass legislation with a simple guiding principle: a pilot should be able to communicate to an audience of any size via any method he or she chooses to share a flight, so long as it is not for profit.

Now, thanks to the powerful efforts of Sen. Mike Lee and other members of Congress, Democrats and Republicans support the revised Aviation Empowerment Act, in which the FAA reviewed and proposed language consistent with our guiding principle and allows for Internet-based expense sharing.

In the midst of a key Senate Committee considering this language, our very own Aircraft Owners and Pilots Association (AOPA) intervened against it. AOPA is a non-profit organization founded 78 years ago with the purported goal of preserving a pilot’s freedom to fly and representing GA interests. Yet, AOPA’s stated vision of preserving pilot freedoms and fighting to keep General Aviation accessible to all stands in direct contradiction to its actions regarding the revised Aviation Empowerment Act, and, indeed, the commitment AOPA makes to all of its members.

AOPA’s opposition to this measure is baffling, as it is undeniably pro-General Aviation. Among other things, it:

• Decreases the cost of aircraft ownership.
• Promotes safety by allowing pilots to keep their skills current.
• Stimulates economies at regional airports and FBOs.
• Brings the U.S. in line with the European Aviation Safety Agency, who embraced flight sharing years ago.

It is difficult to speculate regarding AOPA’s motives, but one thing is resoundingly clear: AOPA is siding with business aviation industry lobbyists, ignoring the interests of their own members, and departing from Europe’s general aviation success story.

We also understand that despite this incredibly important issue for General Aviation, AOPA has refused to survey its membership to determine whether they support flight sharing. Thus it seems clear that AOPA is ignoring the pilot members it exists to support, in favor of the shortsighted views of a few members of its management team.

The rest of the world is either moving in the direction of freedom for pilots or has already done so, but AOPA is stifling this innovation in the birthplace of aviation.

We are committed to the passage of the revised Aviation Empowerment Act and we need your help in mobilizing support for the bill.

Call AOPA: 1 (800) 872-2672
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On September 25th, a three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia heard the oral argument in Flytenow, Inc. v. FAA.

The judges’ line of questioning centered on three main points:

1. Whether the FAA letter of interpretation constituted a ‘final agency order’.

2. Holding out - (advertising to the general public) vs. common carrier.

3. Pilot certification.

1. Final Agency Order

Firstly, the FAA conceded that its letter banning expense-sharing was a final order. A final order is a definitive agency view that has legal consequences - here, that any pilot who posts on Flytenow would be in violation of Federal Aviation Regulations - versus an agency opinion that is not enforceable. In this regard, the FAA stated “We do think that the views that were offered in this order do represent the definitive agency views” and that this was the “end of the line” for Flytenow and its pilot members. This is an important point because this court may only rule on final agency orders, so the FAA’s own position stops the court from dismissing the case on lack of jurisdiction.

2. Holding Out vs. Common Carrier

Secondly, the FAA doubled down on its position that the breadth of communication transforms conduct that is otherwise non-commercial (expense-sharing) into commercial conduct (common carrier). Conversely, our argument, consistent with the common law definition, is that the determination of whether an enterprise is a common carrier hinges on whether it exists to make a profit, independent of the size of its audience. If a pilot shares expenses and is thus not engaged in an enterprise for profit, then he or she should be free to communicate without restriction, because the flight does not fall under commercial advertising regulations.

3. Pilot Certification

Thirdly, there seemed to be some confusion on the court regarding a flight operation vs. pilot certification. Most people outside of the aviation sphere are surprised to learn that even commercial or airline transport rated pilots are prohibited from transporting people for compensation on their personal flights, regardless of their extensive training.

Judge Robert L. Wilkins

Judge Wilkins appeared to have the firmest grasp of the record.

On holding out vs. compensation, Wilkins recognized correctly that the definition of common carrier is the threshold question:

The FAA’s acceptance of the common law definition of compensation favors Flytenow because expense-sharing offers zero possibility for profit, and therefore, expense-sharing pilots can hardly be said to be common carriers, as the FAA asserts our pilot members are.

Additionally, Wilkins raised questions regarding the FAA’s rationale in determining what constitutes a holding out:

To these inquiries, the FAA responded with the uncomfortable proposition that it would “depend on the number of friends.”

This does not bode well for our more popular pilot members. On a serious note, we’re not sure how these statements fit in with the FAA’s position in its brief that “friends and acquaintances” are ok but “strangers” are not. Will the FAA now look to see whether you are “close friends” or whether you are just “Facebook friends”?

Judge Cornelia T.L. Pillard

Judge Pillard appeared to accept outright the agency’s application of holding out and at times suggested that “commercial pilots” could pursue a profit, which we know is not permissible under Federal Aviation Regulations.

Mr. Riches responded clearly that “a private pilot, a charter pilot, an airline pilot, Captain Sully, Neil Armstrong, could not share expenses on Flytenow regardless of their extensive pilot training.”

As such, the means chosen by the FAA - prohibiting all pilot posts - is antithetical to the goal of safety.

Judge Douglas H. Ginsburg

Judge Ginsburg’s concerns centered on holding out vs. compensation.

Like Wilkins, Ginsburg focused on the common law definition of common carrier.

The FAA’s position is that there are not cases at common law addressing whether an enterprise is a common carrier based on whether it is holding out; however, the agency did say that courts had addressed holding out in other aviation contexts. This helps our case because the only context in which the courts have addressed holding out is in the differentiation between private carriage for hire (charter operations) and common carriage (airlines) – both commercial enterprises for profit. It would be uncharted territory to use the breadth of one’s communication to determine whether conduct is commercial or not. The court is more apt to apply its longstanding definition of common carrier.

The Bigger Issue

Lastly, we’d like to address a bigger issue. Government’s inability to keep pace with innovation is the biggest threat facing the U.S. economy today. For this reason, we’re also fighting for legislative reform by working with Congressman David Schweikert of Arizona to introduce the “Aviation Cost and Expense Sharing Act of 2015”. The sharing economy helps us as a nation to better utilize our resources and continues to improve the way we live and communicate.

You can help show Congress that this is an issue that needs to be addressed by contacting your representatives with the following message:

Support the Sharing Economy, Support Aviation Cost and Expense Sharing Act of 2015

The sharing economy helps us as a nation to better utilize our resources, improve the way we live, and spur economic growth by harnessing technology. I believe in the sharing economy and strongly encourage you to support the Aviation Cost and Expense Sharing Act of 2015 to allow pilots to communicate with the public, in any manner the person determines appropriate, to lawfully share expenses with his or her passengers under 61.113(c) of title 14, Code of Federal Regulations. Contact the office of Congressman David Schweikert for more information.

Category: Transportation

As of April 8, 2015, we filed the last of the legal briefs to be submitted to the Court before oral arguments are scheduled and a ruling from the Court is issued. We urge you to take a look at our reply brief, but below is a summary of the FAA’s position and our reply.

Throughout its brief (and throughout this entire process), the FAA continues its attempt to hammer a square peg into a round hole, applying an incongruent regulatory framework (i.e. “common carriage”) to the activities of expense-sharing pilots.   

In its brief, the FAA made two arguments about why Flytenow pilots must receive Part 119 certification reserved for common carriers (i.e., airlines, buses, taxicabs, passenger trains, cruise ships, and the like).  First, by sharing expenses with their passengers, Flytenow pilots are receiving “compensation” as common carriers.  Second, by using the Internet to communicate travel plans on Flytenow’s exclusive website, Flytenow pilots are indiscriminately “holding out” transportation services as common carriers. Both of these arguments miss the mark.  

Firstly, if the FAA’s interpretation of Flytenow pilots as common carriers is correct, then Flytenow pilots would be the only common carriers in history to not seek commercial profit from their operations. As we have pointed out, the term “common carriage” is well-known and understood by the courts, and refers to a commercial transportation enterprise that is willing to take all comers who are willing to pay a fare, without refusal.[1] A commercial enterprise is a business pursuit for livelihood or profit.[2] Our argument is that Flytenow pilots are not, and by definition cannot, be engaged in a commercial enterprise (and hence, common carriage) because there is no profit or ability to earn a livelihood by participating on Flytenow; rather, a pilot can only defray a portion of their operating expenses.

Conversely, the FAA argues that whether or not a commercial enterprise exists is “wholly inapplicable” because expense-sharing, as an exception to compensation, is itself compensation.[3] The FAA holds this position despite the fact that the preamble to the Expense-Sharing Rule resolved the issue conclusively, stating, “[O]ne or more passengers contribut[ing] to the actual operating expenses of a flight is not considered the carriage of persons for compensation or hire.”[4] We referenced the FAA’s analytical contortion in our previous post, Missed Approach: FAA Says Flytenow Go-around, and are confident that the Court will see through this line of thinking because a determination that an exception to a definition is the same as the definition would undermine the regulatory scheme set out not only in the Expense-Sharing Rule, but also any other regulatory scheme to which this logic is applied.

Next, common carriage requires that a common carrier must accept paying passengers, without refusal. This requirement of a common carrier stands in stark contrast to Flytenow, where pilots can accept or reject a passenger’s request to join a flight for any reason, and at any time. As such, pilots on Flytenow have exactly zero indicia of engaging in and providing common carriage. The FAA disagrees, stating, “Flytenow pilots and other common carriers share the relevant trait of holding themselves out to the public.” Even if pilots communicating their personal travel plans shared relevant traits with common carriers, which they do not, the FAA ignores all the other traits that expense-sharing pilots and common carriers do not share (e.g., see above). By the FAA’s logic, elephants, snakes and ropes should be treated the same because elephants have rope-like tails and snakes have rope-like bodies.  

Secondly, the FAA contends that by posting their personal travel plans on an exclusive website, Flytenow pilots are “holding out” transportation services that are “indiscriminately available” to the public. To support this argument, the FAA claims that “there is no indication that Flytenow ever denies membership to a prospective passenger.” While this is simply false (see our Terms of Service, “Either You or We may terminate Your participation in the Flytenow Platform by removing Your information at any time, for any reason or no reason, without explanation . . . .”), the argument still falls short because ‘holding out’ prohibits only indiscriminate offers of air transportation and, in contrast, Flytenow pilots only communicate discriminate offers. More directly, even if Flytenow’s website was entirely open to the public, which it is not, the FAA’s argument still fails because a pilot’s communication of his personal travel plans is not indiscriminately available, but rather, is discriminately available because the pilot controls the flight and directs when and where he is traveling, as well as who is traveling with him at any time. This is also fully consistent with the common purpose rule – a flight is by definition only discriminately available if pilots and passengers have a common purpose, and a private pilot has his or her own reason for traveling to the destination.[5][6]

Next, the FAA makes perhaps the most astonishing argument by seeming to assert that only “friends and acquaintances” may share expenses under the Expense-Sharing Rule, while “strangers” may not.  This assertion is completely arbitrary and unsupported by the plain language of 14 C.F.R. § 61.113(c), decades of precedent, and the record in this case. Nothing in either the language of the Expense-Sharing Rule or the regulatory history of that provision even remotely suggests that individuals must have a preexisting friendship or relationship in order to share flight expenses. This “affinity” distinction also raises several questions, namely:

• Is it true that two Flytenow members could use Flytenow’s communications platform to share expenses if they had a preexisting relationship, while members who had no such relationship would be prohibited from doing so?

• Will the FAA now be responsible for determining whether or not people are “friends or acquaintances” when they share expenses?

Interestingly, in its brief the FAA squarely reaffirmed the Ware interpretation which found it permissible to post flight details on a school bulletin board and stated “if you plan to go to St. Louis for the weekend, there would be nothing wrong with your advertising on the school bulletin board for other students to accompany you in order to defray your costs.” Which begs the question: If the FAA now mandates friendship in order for two people to share expenses, why did the FAA embrace the Ware interpretation? The answer, of course, is that the FAA’s new affinity requirement is arbitrary, capricious, and plainly not in accordance with the governing regulations or decades of the FAA’s own legal interpretations.

Finally, the FAA argued that the Court is “barred” from considering Flytenow’s “constitutional claims” (see our previous post for more detail) because they were not raised in our initial Request for Interpretation. The legal precept of barring an argument for not raising it at a prior occasion is known as “exhaustion”, and as used by the FAA, is a blatant attempt to deflect the meritorious constitutional claims through procedural means. First, the FAA was on notice of the constitutional arguments in our Request for Interpretation. Second, even if they were not on notice, the FAA Ruling banning expense-sharing is itself the event that implicated constitutionally protected speech, giving rise to the claims. Third, “exhaustion” typically applies when there are extensive administrative processes, not as we have here, a single letter ruling. Fourth, the constitutional arguments are properly before the Court, because, as the Supreme Court aptly stated, “Constitutional questions obviously are unsuited to resolution in administrative hearing procedures (viz., an FAA Letter Ruling) and, therefore, access to the courts is essential to the decision of such questions.”[7] While the FAA may have administrative expertise with federal aviation matters, Flytenow’s constitutional claims are properly considered by the Court, not an administrative agency unequipped and unable to resolve constitutional concerns.

We look forward to providing an update on oral arguments when they are scheduled. In the meantime, 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 flytenow.com or subscribing to this blog.

The Flytenow Team

Last February, we asked the FAA to confirm that our operations fit within the longstanding legal precedent permitting ride sharing because inspectors within the FAA intimidated pilots who posted on Flytenow, claiming that a mere posting amounted to a violation. In August, we were shocked when the FAA took a 180 degree turn and banned ride sharing, claiming that posting a planned flight for the purpose of identifying a common purpose would be considered “holding out” for compensation, requiring a pilot to obtain a part 119 certificate. This conclusion extinguishes what the FAA has in itself characterized as a pilot’s “traditional right”. On Monday, January 5th, 2015, we filed suit in the United States Circuit Court of Appeals for the District of Columbia to overturn the FAA’s ruling barring expense sharing. We’ve summarized our Opening Brief below.

In its ruling, the FAA upends over four decades of established legal precedent and common practice among private pilots – sharing expenses with passengers to make flights on small aircraft more accessible and cost-effective – and creates a new regulatory regime which directly contradicts the current Expense Sharing Rule. Under the FAA’s new regulatory regime, however, a pilot’s mere communication with potential passengers will be considered advertising indiscriminate air transportation services (“holding out”). As such, the FAA disregards the common purpose test, traditionally used to determine whether expense sharing constitutes compensation, and instead, declares that all expense sharing constitutes compensation. Such a misapplication of the Expense Sharing Rule is arbitrary, capricious, and cannot be reconciled with the plain language of 14 C.F.R. § 61.113(c).

We’re now left in the strange conundrum of attempting to engage in expense sharing without being able to communicate the details of a planned flight to a passenger. This is the enigma we mentioned in our previous post and what we ultimately request relief from.

We are also challenging the ruling on Constitutional grounds. Everyone, including the FAA, agrees that expense sharing among pilots is in accordance with current Federal Aviation Regulations. The only thing that has changed is the means of communication. Rather than pilots sharing their travel plans via phone, email, or a bulletin board at a regional airport, they now communicate those plans via Flytenow (the Internet). By requiring a Part 119 certificate for pilots to communicate their flight plans online, the ruling imposes an impermissible constraint on speech.

Moreover, by closing off the Internet as an avenue for speech, the FAA gives no standards whatsoever in outlining what constitutes holding out. Thus, the FAA does not specify what methods of communication are permitted and is unconstitutionally vague.

Finally, the FAA’s sweeping ruling violates the Equal Protection clause of the Fifth Amendment by treating an occasional expense sharing pilot the same as it treats commercial air carriers like American or Delta Airlines. Sometimes the grossest discrimination can lie in treating things that are different as though they were exactly alike. In doing so, the ruling eliminates any meaningful distinction between private and commercial flight operations, and we’re challenging the ruling on this ground as well.

We thank you for all your support and the countless emails we have received during this process. As promised, we’ll continue to defend the right of pilots and aviation enthusiasts to share expenses. If you haven’t done so already, please sign up for updates by creating an account and subscribing to this blog. We welcome comments below. Thank you!

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]

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. The ruling summarily concludes that pilots using the platform are engaged in compensation, and thus, “common carriage”.

"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.

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. 

On February 12th, 2014, Flytenow submitted an official FAA Chief Counsel request for legal interpretation of its services. The FAA's self-imposed deadline to respond to our request was June 18th, 2014. 

In lieu of a formal deliberation from the FAA, Flytenow offers the following interpretation of the FAR's in consultation with Gregory Winton of the Aviation Law Firm for general information purposes only:

Shared Expenses & Common Purpose - 14 C.F.R. 61.113(c)

Flytenow is a service used by pilots who intend to engage in the genuine sharing of expenses. 14 C.F.R. 61.113(c) “allows a private pilot to receive pro rata reimbursement from his passengers for fuel, oil, airport expenditures, or rental fees, so long as the pilot and his passengers share a bona fide common purpose for conducting the flight.” See Legal interpretation to Mark Haberkorn from Rebecca B. MacPherson, Assistant Chief Counsel for Regulations.

According to the FAA, “the ability of pilots to list flights with no specificity as to date or points of operation would appear to ignore the common purpose requirement, however, and raise concern about the potential holding out an offer of air transportation in violation of §119.5(k)” See Legal interpretation to Ron Levy from Loretta E. Alkalay, Eastern Region Regional Counsel.

Flytenow facilitates common purpose because pilots (not enthusiasts) unilaterally dictate the points of operation, date, time, and purpose of an adventure, and an enthusiast subsequently expresses shared interest in a pilot’s specific adventure by requesting to join it. The pilot may accept or reject an enthusiast’s request for any or no reason, and at any time.

Holding Out - 14 C.F.R. 119.5(k)

'Holding out' is accomplished when one communicates to the public, or a segment of the public, that transportation services are indiscriminately available to any person with whom contact is made.”  See Legal interpretation to Mark Haberkorn from Rebecca B. MacPherson, Assistant Chief Counsel for Regulations (emphasis added).

'Holding out' does not apply when a pilot and an enthusiast share common purpose because holding out is a defining characteristic of common carriage, transporting persons or property  from place to place for compensation (See Advisory Circular 120-12A) - not the sharing of expenses under 14 C.F.R 61.113(c).

Still, even if ‘holding out’ did apply, a pilot's adventure on Flytenow does not communicate that transportation services are indiscriminately available because pilots unilaterally dictate the destination and purpose of their flight and may decline an enthusiast’s request to join them for any or no reason. Therefore, a willingness or reputation to transport all within a class is not established.

Finally, the 'holding out' provision is found in Part 119, in which the Applicability section states:

“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.” (emphasis added).

For the reasons stated above, Part 119’s first applicability element is not met. Secondly, Flytenow does not allow airplanes with a seat configuration of 20 or more passengers, or a maximum payload capacity of 6,000 pounds or more. However, if we become aware of any abuses, we reserve the right to ban members indefinitely.

We hope this clears up any concerns. We will continue to operate, allowing pilots to share the thrill of aviation and giving enthusiasts easier access to the world of private aviation. 

Please send any questions to legal@flytenow.com.