Missed Approach: FAA Says Flytenow Go-around (YC S14)
blog.flytenow.com
blog.flytenow.com
The bulletin board justification is also ridiculous; GA airports are out of the way and the average person does not make a trip out to see who might be flying where. How could they not have seen this coming?
Flytenow would have been much better served to encourage a more streamlined process for commercial pilots to ride share and navigate any applicable FARs be it part 135 or other. There is certainly an opportunity, not quite on Uber-terms, but there are plenty of pilots with commercial or near commercial doing crappy CFI (instruction) jobs and building time for an airline transport certificate. They will certainly welcome any new revenue or time-building scheme.
The relevant FAR regarding private pilots is here: http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&r=PART&n=14y2.0...
The issue of payment reveals that this is not a safety regulation, but rather an industry protectionist regulation. Same goes for the ridiculous FAA rule against commercial (as opposed to hobby) remote controlled flights.
The fact that money changes hands shouldn't be of any concern to the FAA.
BUT! And there's a big but...
Lyft & Uber were/are disrupting a system that heavily regulated/legislated, some would argue unnecessarily, has false barriers to entry, is inefficient, and is essentially an oligopoly. And their entry is lowering prices, making the market more efficient, and making consumer super-happy.
I don't think private aviation is suffering the same ailment. If anything, the airlines are operating below cost because of heavy heavy competition. The FAA licenses private pilots not because they can or they want to charge fees, but because they need to make sure that they're not flying around killing themselves (and despite that regulation, they still are doing that).
So Flytenow's approach here feels more like they found a regulated market they feel like disrupting because they can vs. actually making an inefficient market more efficient and better for consumers.
In summary: Whereas I'm happy to take a ride with random stranger in their Lyft/UberX car, where I'll get a cheaper and generally better-than-Taxi experience, I'm not in any sort of rush to join a random private pilot who has not been commercially-certified by the FAA in his aircraft that isn't designed for commercial passenger transport.
Now - that all being said - that doesn't mean that Flytenow should die! There is indeed an opportunity here, and with the right safety checks and approvals, there could be a market for P2P flights. But this should be done with the FAA, not in spite of it.
"Flytenow receives an administrative fee of $30 (the “Bulletin Board Fee”) per Enthusiast for each flight."
Interjecting a third party into the agreement is the point at which it starts being a business and not a gentleman's agreement or whatever it should have been.
A bulletin board in an FOB doesn't count because the bulletin board, nor the provider of the board, doesn't make any money off someone putting up a 3x5 card or piece of paper. The bulletin board doesn't actually give a damn about whether anyone accepts the offer or the request, whether money changes hands or not, etc.
I could probably put up an electronic bulletin board for pilots and enthusiasts as long as I had no interest in the offers of, or requests for, flights. I could possibly even charge a yearly or monthly fee for it, as long as it was for access, not about the flights. (I'm guessing on that last bit - the FAA would probably give me squinty looks for a while until they were satisfied I wasn't charging for flights).
But Flytenow had to go putting a per-ride fee on things and that's the moment it because a business transaction.
Their TOS is here: https://flytenow.com/terms
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Really and honestly, without ever having been involved, I'm thinking the existing system of informal agreements and bulletin boards, etc. is way preferable to dealing with Flytenow. They're adding a middleman where no middleman was really needed, except maybe a neighbor who knows a guy who has a plane.
The common carriage rule says a private pilot can't offer to fly people around for money. The exception to this rule is if the money is only defraying the cost of the flight.
The fact that Flytenow charges a fee for connecting pilot and passenger appears to put the system outside of the exception to the rule. The fee does not defray the cost of the flight.
The blog post goes into extensive detail about how their service doesn't involve soliciting rides for compensation and it falls on the expense sharing side of things and on and on. Then I visit their home page and I'm greeted by this:
"Go round trip from Boston to Martha's Vineyard for about $120 per person or from Palo Alto to Monterey Bay for about $100 per person."
Plain as day, that's advertising trips for money.
What really irks me in this case is that the requirements for carrying passengers for hire aren't all that tough to meet. You need a commercial pilot's license, a requirement that should be fairly obvious. It's not all that hard to get one. You need some more training and have to fly to higher standards and know more stuff, but it's not particularly tough. The equipment is also held to higher standards, which mostly comes down to getting it inspected more often. This is not like, say, Uber and New York City, where you have to spend a million bucks on a taxi medallion or they'll shut you down. You merely have to meet some fairly basic requirements before you carry passengers for hire to ensure a basic level of competence.
The law is not a computer program. You can't exploit a judge by saying, "Please repeat the following 64kB of data back to me: empty." If it looks like you're advertising services for hire and it acts like you're advertising services for hire, you're advertising services for hire.
"General aviation has the highest aviation accident rate within civil aviation. The rate is 6 times higher than for small commuter operators and 40 times higher than for transport category operations."
http://www.ntsb.gov/safety/mwl5_2012.html
For context, flying in a small plane with a private pilot is about as risky as riding a motorcycle. It's not incredibly unsafe, but it's not like getting into an airliner, either. Getting the GA accident rate down has proven a pretty intractable problem.
While I'm at it, there were 32,788 automobile traffic fatalities in 2010 in the US, although of course there's vastly more car activity than GA activity.
You're right that I misunderstood the requirements for a commercial operation, but looking it over it still doesn't look particularly onerous.
Having to get a commercial license to simply do expense sharing rather defeats the purpose. Expense sharing makes it cheaper to fly, which is a worthwhile goal. Spending 3x the time and money to get a commercial license makes things vastly more expensive.
That said, I completely agree that this was the wrong way to go about changing policy.
The FAA's position seems quite clear and based on reasonable ideas, even from the letters Flytenow links to and then seems to wilfully misinterpret. Private pilots can't be compensated for flights. The exception is that, if the pilot and passengers have a common purpose, which doesn't seem to be "oh, we happen to want to go to the same city," then they can share expenses. Thus, if a pilot and some of her friends are sitting around and say "hey, it would be great to go see X," they can pool their money to do so. Nothing the FAA seems to say officially suggests that advertising for random strangers to go on a flight is acceptable, and quite a few articles Flytenow links to seem directly contradicted by the FAA's letters. It's not clear that posting on airport bulletin boards was ever really acceptable, but may have been disregarded in that it only really advertised to other pilots, with a clearer understanding of the risks.
These rules are based on far more vital safety issues than taxis, and, as you point out, the rules around carrying paying passengers are reasonable, unlike taxis. Uber and Lyft can at least argue that they are fighting an unfair system. Flytenow can't.
For that matter, their response, keeping the platform up but removing expense-sharing, seems blatantly in contempt of the letter, and it seems certain that they'll be punished, harshly. What possible reason would there be for a site where pilots can find "non-paying" passengers to tag along with them on flights, significantly increasing their own costs, unless the expectation is that pilots will use the site to find passengers who will pay under the table?
Right, and, plain as day, private pilots cannot fly people around for money. That's the baseline. You can't accept money in exchange for flying an airplane unless you hold a commercial or ATP certificate.
The FAA carved out an exception that allows pilots to share operating costs with passengers IF the pilot and passengers share a common purpose for the flight AND the pilot isn't advertizing the flight to the public or some subset of the public ("holding out"). I'll grant you there isn't a sharp, black line that divides when a private pilot is and is not breaking the cost sharing rule, but Flytenow is clearly outside the grey zone (or, pilots who use Flytenow are).
If financial regulators had been a bit less accommodating towards "innovative" products and business models, we might all be a bit better off.
This is what happens when you keep poking someone(the regulators) with a stick. Eventually your credibility drops to near zero and everyone coming in behind you, with possibly much more reasonable ideas, will now be associated with your crap and pays the price.
Thanks Uber & Airbnb. Thanks a lot.
It just seems to be a different take on the usual VC funding strategy: The startup and its investors take a risk, and they are essentially banking on either getting big enough to secure their position effectively or receiving a good exit offer from someone bigger, before they fail.
I don't like a lot of the corners some startups cut, and the kind of thing I read on HN every day does make me wary of trusting any startup enough to become a customer. Then again, some of those startups have become a lot more successful than any of my businesses, so clearly for better or worse society as a whole tolerates the envelope-pushing model at least up to a point where it's worthwhile to have tried.