Uber Convenient
bringing ride-sharing to the skies

Sept. 22, 2016

With all the nightmares involving commercial air travel, the industry seems ripe for disruption.

An Uber or Lyft of the skies?

The popularity of the 'sharing economy', especially ride-sharing, (although it's often accused of being exploitative  of drivers and the competition) is spilling over into new sectors, such as planes.

So far it's been a bumpy business model, with the FAA shutting down several aviation businesses promoting this service. 

But the mentality of some of the start-up venturists was partially to blame -that is, it's easier to ask for forgiveness than to ask for permission.

A Legal Dogfight With Federal Regulators

One sticking point is that under FAA regulation  14 CFR 61.113, private pilots are prohibited from accepting payment for taking passengers on previously unscheduled flights. Another is that only professional commercial pilots and charter certified airplanes can  be used.

To work around this, the next-gen Uber-like plane provider must get the customer to pay the company, and not the pilots directly. The pilots do receive money for the flight, but it's for splitting the cost of gas and maintenance on a flight that the pilot was going to take anyway. Think of it like hitching a car ride and paying for the gas to cut the driver's expenses.
Lydd Air

Will the FAA to greenlight this interpretation of the law? 
A Chicago startup thinks so, and says there's a way to bring air travel to the 'sharing economy' by connecting passengers to licensed, professional pilots. 

FlyOtto has just launched service nationwide, and says travelers can find, book and pay for regional flights on privately chartered aircraft from a phone or computer. It claims the company will follow all FAA regulations.

"We designed our business to be completely legal form day one," said founder Rod Rakic. "It's aligned with federal air regulations, state and local laws...(Our pilots are) getting oversight from the FAA on everything from safety operations, maintenance, and operational oversight."

The way it works is users log on to the company's website and enter their pickup and drop off destinations. They are then matched with a pilot and aircraft--  understand that flying in a private plane  does not mean flying in a Gulfstream jet.  Most of FlyOtto's pilots operate  turboprops that seat three to nine people. Users chose their date and time, and pay online. 

The service works with over 5,000 airports around the country  says the company and they've signed up 12,000 pilots to fly. FlyOtto will take 7% of the transaction, giving 3% to the credit card companies and the rest to the plane operator.

The service is targeted to travelers who'd otherwise spend four to six hours in the car or all day inside airport terminals. It is not so much intended for people traversing major hubs like Chicago to Las Vegas, for example, but is more suited for those poorly served by the airline hub-and-spoke system and want to get to small and medium-sized towns, e.g.  Colorado Springs, Tulsa, El Paso, etc.

Convenience Comes At A Price

Flying Magazine tested FlyOtto departing Chicago Executive airport (PWK) for Madison, Wisconsin. In a few seconds, FlyOtto offered up a handful of possibilities to carry as many as three people. The first quote, using a Piper Arrow, cost $842 on a trip expected to take about an hour. Another operator offered a Cessna 310 for $1,467 but added the flexibility to carry five people, turning the fare into just under $300 per person. Top-end pricing for FlyOtto on the simulated trip used either a Pilatus PC-12 or a King Air 350 to carry as many as nine people. The high-end fare structure costs runs between $9,000 and $14,000 and delivered people in half the time of the least expensive aircraft.

Paul Hudson, FlyersRights' president commented, "Poor service by the airlines are driving more people to these services. At the low end, that means driving or doing electronic meetings, at the higher end, it's driving larger expansion of corporate jets and ride sharing through general aviation."


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