Posts Tagged ‘collaborative consumption’

Regulations Are Written In Blood: Why Planesharing Is Grounded For Now

Thursday, August 7th, 2014


planesharing is grounded until further notice

In aviation, we say that “regulations are written in blood.” Pilots often complain about regulations, but they generally recognize that those regulations are often based on experience and events that have cost others their property, their lives, or both. We know that the legal environment of aviation often lags behind reality. Technical innovations can make older regulations obsolete. But sometimes the innovation doesn’t change the relevance of the regulations or dilute the blood in which they are written.

Planesharing Explained

Laws should serve as a safety net, not a noose. Aircraft are expensive to own and operate. Now, more than ever, making aircraft more useful and ubiquitous is critical for the survival of aviation. Uber, Lyft, AirBnB, VBRO, GetAround, and BoatBound make it easy to put substantial assets like cars, boats, and homes to work. There is no federal statute that makes renting out your spare bedroom generally illegal.

“Planesharing” tries to apply the same model to private air travel. Planesharing is the concept of pilots use services on the Internet to post details of their upcoming flights in the hopes that potential passengers will find the flight information, join the pilots on their flights, and split the cost of the flight with them.

Startups like Flytenow, AirPooler, ShareMySky, AiirShare, Pro Rata Share, Wingman, and others have developed business models around facilitating planesharing. Venture capital should not be seen as some kind of signal that startups can ignore the rules the rest of us have to live by.

Pilots have been legally sharing the costs of privately operated flights for decades, but purpose-built online apps like these have made this kind of sharing more like commercial flying.

How Private and Commercial Flying are Different

It is sometimes said that the most dangerous part of a flight is the drive to the airport. That’s true, but only if you’re flying with a commercial operation. Airline (Part 121) and charter (Part 135) flying is something like 500 times safer than operations conducted by private pilots (generally conducted under Part 91). There’s good reason for this. Airlines and charter operators have to achieve rigorous certification of their aircraft, facilities, operations, and pilots and maintain that certification through constant monitoring, training, and investment. If you look at the Federal Aviation Regulations (FARs) in printed form, the requirements take up about an inch of thickness and that’s just the regulations themselves. Aircraft inspections happen at least every 100 hours of operating time. Operating specifications, maintenance records, pilot manuals, maintenance manuals, dispatcher manuals, and other necessary paperwork fills many linear feet of shelf space. Pilot experience could be as low as 250 or so hours, but most pilots flying for commercial operations have thousands.

Private operations, (under Part 91) on the other hand, don’t have to do as much. They’re subject to maybe a half inch of regulations and a few operating manuals. Private pilots might have as little as 50 hours of flight time. A mechanic may only be required to even touch the aircraft once a year.

It’s reasonable to accept more risk when flying with a private individual vs. a commercial operator. Flying a helicopter in combat has a lower accident rate than flying single piston engine airplanes. Remember folks, flying isn’t necessarily dangerous, but it is terribly unforgiving.

The Regulations and How Planesharing Gets Pilots In Trouble

This difference is the basis for the different FAA regulations for commercial and private operations. The regulation that applies to private pilots (FAR 61.133) says that “no person who holds a private pilot certificate may act as pilot in command of an aircraft that is carrying passengers or property for compensation or hire; nor may that person, for compensation or hire, act as pilot in command of an aircraft.” That same regulation goes on to say that “a private pilot may not pay less than the pro rata share of the operating expenses of a flight with passengers, provided the expenses involve only fuel, oil, airport expenditures, or rental fees.”

Planesharing depends on the “pro rata share” part of the regulation. As long as a private pilot operating under Part 91 collects only part of the money for the flight, he or she is in the clear, right? But let’s be honest. Privately this easy, and only when you start fishing about for people we have no prior relationship with do any of these new apps make anything easier. Blurring the lines between private and commercial flying is a problem. The confusion is in the uninitiated passenger believing that he or she is getting the commercial level of safety when the pilot is operating under the much more permissive rules of Part 91.

So the FAA typically applies a two-part litmus test.

1. Is the pilot “holding out” the service to the public? Put another way: How much does an operation look like an airline or charter service? FAA Advisory Circular AC-120-42 says that one becomes “a common carrier [i.e., an operation that requires the more rigorous certification] when it holds itself out or to a segment of the public as willing to furnish transportation within the limits of its facilities to any person who wants it.” What does a planesharing pilot do? Lists his or her flight and invites anyone with money to come sit in one of the other seats, right? Short of the person being overweight for the aircraft or being disagreeable in some way, a planesharing pilot is offering to furnish transportation to all comers.

2. Do the pilot and the passenger(s) have “common purpose” for the flight? The regulations (and all FAA guidance and rulings to date) clearly contemplate friends or family loading into a Cessna 172 and flying somewhere for dinner or sightseeing. The FAA requires that everyone in the aircraft have something in common about the mission. Planesharing encourages passengers who have no preexisting relationship with the pilot (otherwise, why is an online service necessary for them to find each other?) and it is almost certain that the pilot and passengers will have different objectives once they arrive at the destination. What are the chances that perfect strangers will turn out to be heading to the same golf course, restaurant, or shopping district? Even local flights which start and end at the same airport, which the FAA regulates as sightseeing flights are regulated. Air tour pilots are required to keep within a limited distance from the airport, submit to more drug tests, and hold at least a commercial pilot certificate.

It is possible to engage in planesharing in a compliant way. You build a group of friends over time, say on Pilots of America or a similar message board. You all agree to meet at a regional airport and fly in Bob’s Cessna 206 down to Sun ‘N Fun in Florida in March for three days to see the airshow and drool on the latest aircraft. You split the cost when it’s all over. Great.

But, if we’re being honest with ourselves, does anyone really think that many planesharing flights would work this way? A majority of them? Fewer? Any? The FAA administrator and staff are reasonably intelligent. The FAA can identify a sham when the FAA sees a sham and so can we. We need to be honest with ourselves and admit that most flights under the planesharing model are not legal under the current regulations. The arguments made by these companies that the rules don’t apply to them just don’t hold water.

Could the FAA come up with a safe harbor under the rule? Sure. What would that look like? A demonstrable pre-existing relationship between the pilot and passengers of at least such-and-such a duration, supported by family relationship or documentary evidence like date-stamped e-mail correspondence? A requirement that pilot and passengers all do the same thing at the destination, supported by a file folder full of consecutively-numbered concert tickets or a guest check with the appropriate number of entrees?

At what point do the administrative costs outweigh the benefit of such a safe harbor? It’s complicated. Previous legal interpretations from the FAA like here and here make this clear as mud. Creating a safe harbor under current regulation would be really tough. We’ve got to balance personal choice with public expectations of safety.

Anyway, we’re going to find out soon.  At least AirPooler and FlyteNow have petitioned the FAA for an administrative ruling about the legality of planesharing. The FAA told the pilot community that it would rule by mid-June, but that deadline has come and gone while the FAA continues to think about the issue. In the meantime, good on AirPooler for recently advising pilots to hold off on listing flights pending the FAA’s ruling. My opinion doesn’t really count for much. The ball is in the FAA’s court. Enforcement actions are possible and even likely before the smoke clears.

Why So Serious?

If you’ve read this far, you might wonder why I’m disparaging a potentially helpful and cool new aspect of the sharing economy. I love innovation and new ideas as much as anyone. I have a dog in this fight. But it’s a different dog and I’ve defined the fight for what I believe is a better way.

For aviation, collaborative consumption isn’t anything new. We’ve been buying and leasing back airplanes to flight schools and flying clubs for decades. The rest of the world was just catching up with us. There’s still plenty of room for innovation in the business of aviation. Two of my favorite examples are ForeFlight and SurfAir. They’ve disrupted the experience, without ignoring the rules.

Regulation and innovation can coexist. My own example is OpenAirplane which tackles the problem that we can solve legally by making more aircraft accessible to more pilots. The idea is to make everyone’s pilot certificate more useful.

In a nutshell: It used to be that each airplane rental operation (and its insurance company) required that a pilot do a local checkout flight in the airplane before renting it. OpenAirplane standardized the checkout process and with support of insurance industry. Now, pilots go through a single annual checkout flight that tests their skills and verifies that they are as safe and competent as the FAA requires. The standards are pretty much the same ones that the FAA uses when initially certifying pilots and they’re evaluated by designated flight instructors who are familiar with the process. After that Universal Pilot Checkout, the pilot can rent the same kind(s) or airplane(s) at any participating facility (currently more than 60 across the US). It’s all completely legal.

While planesharing could expand the addressable market for our company, we’re not willing to put pilots at risk of violations or worse. OpenAirplane solves as much of the problem as we can solve without breaking the law. We put more pilots in more airplanes more often. We don’t do anything for non-pilot passengers yet, but only because – well – illegal.

But we still frequently get lumped in with planesharing operators when folks talk about developments in aircraft availability. We’re not a planesharing operation. And we don’t want to be unless he rules change. Planesharing can’t solve the problem that it claims to solve without a deregulation of private aviation or a big shift in FAA doctrine.

You Can’t Fool Newton and Bernoulli

The principles defined by Isaac Newton and Daniel Bernoulli govern the safety of flight. They don’t care about social networks or online collaboration, no matter how innovative or cute. And mountains of evidence tell us that Newton and Bernoulli favor the better-maintained aircraft, better-trained pilots, and more comprehensive operating procedures that one finds almost exclusively in commercial operations. As long as the safety of passengers – or at least honesty with passengers about the wildly different risk profile that they face in an aircraft with the average a planesharing pilot – is the point, planesharing doesn’t work.

The FAA regulations allocate privileges to pilots based on a careful balancing of those privileges with the skills and experience that they have demonstrated. Planesharing, as currently conceived and practiced, encourages private pilots to operate de facto charter services or air carriers. It’s a bad idea. Unless the FAA reverses its position, planesharing remains grounded.