Tuesday, June 27, 2017

Why Isn't There An Uber For Air Travelers? Ask The Federal Aviation Administration

Regulations: If you've never heard of Flytenow or AirPooler, don't kick yourself. Although they were once poised to become the Uber and Lyft for air travelers, federal bureaucrats strangled these innovators in their cribs. It's yet another example of how government regulations are all too often the enemy of consumers.

In a new paper for the Mercatus Center at George Mason University, senior research fellow Christopher Koopman details the short lives of these promising startups, how the Federal Aviation Administration snuffed them out, and what can be done about it.

Like their ride sharing counterparts, these flight-sharing companies hoped to leverage the power of the internet to fill up empty seats on private jets. Someone looking for a flight to a certain destination could quickly see if any pilots were flying there.

The companies took care to comply with already stringent FAA regulations. The pilots, for example, weren't going to make a profit. The extra passengers would simply cover a share of the flight costs. Plus, the FAA has long allowed private pilots to post upcoming flights on physical bulletin boards for potential ride sharers.

What's more, the European Union, which isn't exactly a beacon of lax safety regulations, has given the green light to these kinds of internet-based flight sharing services. Koopman says that these services have more than 10,000 users, including about 2,000 pilots.

This arrangement would have been ideal for private pilots who otherwise eat the cost of empty seats. And it likely would have helped make better use of general aviation aircraft, 24% of which sit idle all year long. It also, Koopman notes, might have sparked a revival in the private aircraft manufacturing business.

For passengers, it offered a possible alternative to the agony of commercial flights, plus the thrill of flying in a small prop plane or private jet. They'd also be able to check ratings of pilots from other users before sharing the flight.

Who is harmed in this voluntary transaction? Only the commercial airlines who would risk losing customers.

Nevertheless, the FAA ruled that these startups violated the government's "common carriage" rule, which would have forced them to comply with hugely expensive regulations designed for major commercial carriers if they wanted to stay in business.

Flytenow decided not to sit idly by while faceless bureaucrats in Washington, D.C., destroyed a promising new business. The D.C. Circuit Court of Appeals sided with the FAA, and the Supreme Court declined to hear the case this January. Flytenow is no more. In its last blog post, it lamented the fact that there is "less choice for consumers, and less innovation in general aviation."

Koopman argues that there is a way to revive these internet-based services, but it will require Congress to get involved. Lawmakers, he says, can more narrowly define "common carriage," so that these flight-sharing services can avoid the FAA's regulatory boot.

Doing that would mean confronting the major airlines — a fight weak-kneed lawmakers aren't likely to want to take on. Consumers should demand that they do.


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