The Fight for “Flyte” Goes to Court

What if by sharing travel costs with a friend or coworker, the government considered you a “commercial operator,” subject to the same regulations as taxi drivers, bus operators, or even train conductors? That would be absurd. But that is precisely what the Federal Aviation Administration (“FAA”) has told pilots of small aircraft who split operating expenses with their passengers.

Pilots of small planes have shared operating expenses with passengers since the beginning of general aviation. In fact, the FAA has permitted cost sharing for over 50 years, so long as pilots pay a pro rata share of costs and do not make a commercial profit from the flight.

Historically, pilots would advertise their flight plans to passengers interested in sharing expenses by word-of-mouth, over the phone, or on airport bulletin boards.

Flytenow, Inc. – a Silicon Valley startup company – simply brought flight-sharing into the digital age. Flytenow operates a website that enables pilots to communicate their travel plans with passengers interested in sharing flight expenses. Only fully licensed and trained pilots flying small aircraft are permitted to join Flytenow as pilot members.

The FAA, however, now claims that these Flytenow-subscribing pilots need the same commercial operating certificate as pilots of large commercial airlines like Delta or Southwest. Even worse, the FAA contends that by using the Internet to share expenses, pilots become commercial operators – a designation reserved for those who make a living by flying planes. In practice, this means pilots can never use the Internet to communicate their expense-sharing travel plans, regardless of training or certification. For example, neither Captain Sully nor Neil Armstrong, nor the safest pilots in the world, can communicate their travel plans online.

The FAA’s position is not only inconsistent with its own regulations, it violates the constitutional right to freedom of speech of pilots who simply want to share travel plans online. In a world where the Internet is changing the way people live, work, and travel, the FAA’s outdated and burdensome regulations, left unchecked, could set precedent for stifling other so-called “sharing economy” innovations.

Represented by attorneys from the Goldwater Institute, Flytenow is engaged in a legal battle against the FAA. And that battle is coming to a crescendo. On September 25th, Goldwater attorneys will present oral argument before the D.C. Circuit Court of Appeals, the nation’s second highest court. The outcome of that argument and this case will determine whether the FAA can stop Flytenow and its pilot members from using the Internet to communicate.

As the sharing economy paves the way for innovations across nearly all industries, this case may also establish a more fundamental legal principle: Entrepreneurs and consumers should be allowed to use new technologies to communicate about lawful activities without first having to ask the government’s permission, and free from unreasonable regulatory interference.