AirPooler Puts Ride-sharing System On Hold While Clarifying FAA Standpoint

Aviation International News » August 2014
AirPooler provides a platform on which pilots can list flights they plan to make and individuals can sign up to occupy a seat on those flights and share expenses. Pilots are not allowed to list flights in an effort to attract passengers. AirPooler handles all the payments and charges an administrative fee, and pilots must also pay part of the expenses for any AirPooler flight.
AirPooler provides a platform on which pilots can list flights they plan to make and individuals can sign up to occupy a seat on those flights and share expenses. Pilots are not allowed to list flights in an effort to attract passengers. AirPooler handles all the payments and charges an administrative fee, and pilots must also pay part of the expenses for any AirPooler flight.
August 6, 2014, 12:25 AM

The AirPooler general aviation ride-sharing system has advised pilot-members not to list any flights, pending a discussion with the FAA to clarify AirPooler’s regulatory standing.

AirPooler provides a platform on which pilots can list flights they plan to make and individuals can sign up to occupy a seat on those flights and share expenses. Pilots are not allowed to list flights in an effort to attract passengers. AirPooler handles all the payments and charges an administrative fee, and pilots must also pay part of the expenses for any AirPooler flight.

In a message to members on July 2, AirPooler cofounder and CEO Steve Lewis said the enterprise has received a lot of interest since its launch in April. “At the same time, some have raised questions as to whether private pilots who list flights on AirPooler’s system might be holding out in violation of FAA regulations. Several of you who are interested in using the service have contacted us to ask for clarification on this topic and some of you have told us you intend to remain on the sidelines pending a clear resolution.”

‘Holding Out’ Defined

These issues have prompted AirPooler to ask the FAA for a legal interpretation of the regulatory framework that allows private pilots to ask passengers to share expenses (61.113[c]) and also the FAA’s guidance on the elusive term “holding out.” The request was directed to personnel, including leaders at the Office of the Chief Counsel and the Flight Standards division, at FAA headquarters in Washington, D.C.

Holding out is the term that addresses offering to transport people or cargo for a fee, and most private pilots understand it is not something they are allowed to do. Lewis told AIN that the legal interpretation that AirPooler is seeking is to show the FAA that the service has nothing to do with holding out. “The single most important and also vexed issue is the one around holding out,” he said. “It appears in quite a few places in statutes and opinions and documents, but connecting the dots is hard even for a trained lawyer.”

AirPooler’s attorney, Rebecca MacPherson, works for law firm Jones Day and was previously the FAA’s assistant chief counsel for international law, legislation and regulations. MacPherson has dug through all the documentation and legal issues surrounding holding out to build a solid understanding of the concept, according to Lewis. “And then she came up with reasoning for our position that holding out is not relevant,” he explained. “The synopsis of our core claim is: we believe there is no limitation on holding out as long as the pilot is not receiving compensation. The FAA has said that certain types of operations by AirPooler are not compensation, and we don’t believe holding out is triggered.”

Lewis says he understands that “this is a difficult issue for the FAA. The regulations were promulgated before any operation of this sort was possible; there was no Internet. The agency needs a reasonable amount of time to evaluate the legal implications. The agency always wants to serve its mission and ensure that public safety is met and that opportunities for abuse are prevented.”

In fact, Lewis believes that a service such as AirPooler helps the FAA monitor the activities of pilots who might want to push the regulatory envelope. Pilot-members have to show that they and their passengers have a common purpose when traveling together and sharing expenses. An FAA inspector could easily see, by logging in to the AirPooler website, whether a pilot is listing a bunch of trips to try to drum up ridesharing business, for the purpose of, say, logging hours cheaply. “Putting [the information] out in the open may make it easier for the FAA to do its job,” he said. “It’s much easier to look at the data for flights listed in public than have to ferret it out. I think they’ve recognized it’s a possible advantage for them.” Pilots also can’t list overlapping flights, which would be a certain indicator of abuse.

In his letter to members, Lewis wrote, “[MacPherson] is confident that our service complies with all federal regulations, including those regarding holding out. We believe our interpretation of the law is firmly supported by the statutes as well as by the agency’s expressed intent when these statutes were originally drafted. However, we also believe the lack of clear agency guidance on the relationship between holding out and compensation has contributed to the persistence of misunderstandings.”

AirPooler is working with FAA leadership “to dispel any doubts expressed by members of the community by the end of this summer at the latest,” according to Lewis. He hopes “this is an opportunity to demonstrate that private enterprise can work with regulators to bring about innovation, while also reinforcing the framework that has made our aviation industry the envy of the world.”

Lewis told AIN, “I think we’ve been given a good hearing. A lot of people are waiting to understand how this is going to go, but everyone is going to be reasonable.”

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David7700
on August 15, 2014 - 11:30am

The FAA disagreed with AirPooler's notion that the expense sharing is actually compensation, which in turn helped to satisfy all 4 prongs of the test for Common Carriage of Persons or Property for commercial operations:

(1) a holding out of a willingness to (2) transport persons or property (3) from place to place (4) for compensation or hire.

This takes it out of the §61.113(c) realm and puts it in the §119 arena.

The fact that the pilots are receiving a share of the cost of the flight was dispositive in showing that there was compensation to satisfy the fourth prong of the test.

"[A] private pilot may not rely on . . . the narrow exception [of §61.113(c)] to avoid the compensation component of common carriage."

 

http://www.scribd.com/doc/236884814/FAA-Ruling-Banning-Planesharing#down...

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