The Regulator Says No to Uber-Flight

America has a proud history of entrepreneurship.  If there is a need, and money can be made, people will leap at the chance to satisfy that need.  Nothing exemplifies this principal more than the meteoric rise of the Uber car service and its imitators.  Why stand on the street corner to try to hail a smelly cab when you can get a nice, cheap town car sent directly to you with a touch of a button on your phone?  Of course, it was only a matter of time before this paradigm got translated to other forms of transportation.  Why spend hours struggling at a major airport to be crammed into a coach seat when small aircraft fly every day with empty space?  Why not just ride-share on a small plane in comfort?

Of course, as Uber has been discovering, nothing is every quite as simple as it seems.  The entrenched interests of the big cab companies have aligned with local taxi cab commissions and regulators to put the brakes on Uber in many locations.

The early success of the would-be Uber’s of the sky are similarly drawing attention from the government.  Last week, the FAA Office of the Chief Counsel issued an opinion essentially grounding this new industry of “peer-to-peer general aviation flight sharing.”  The opinion came about when AirPooler, the developer of “an internet-based discovery platform that allows private pilots to offer available space on flights they are intending to take,” asked for confirmation that pilots who offered the service were not commercial operators who needed at Part 119 certificate.  AirPooler contended that a Part 119 certificate is only needed when the operator is involved in a “major enterprise for profit,” and that the only payment by a passenger using the service is the pro-rata share of the legitimate flight expenses, such as fuel, oil, and fees.

The Chief Counsel’s Office, however, disagreed.  The opinion notes that since 1963, the FAA has broadly interpreted Part 119 as applying to any compensation for transportation or common carriage, and that compensation includes reimbursement for any expenses of the flight.  Accordingly, the Chief Counsel held that “by posting specific flights to the AirPooler website, a pilot participating in the AirPooler service would be holding out to transport persons or property from place to place for compensation or hire.”

So, for now, it appears that “ride-share in the sky” is an idea whose time has not yet come.  On the other hand, entrepreneurs hate it when money is left on the table.  It will be interesting to see if someone will be able to come up with another clever idea to get their hands on it.

(Originally posted August 21, 2014)

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