Entrepreneurship Posted on January 23, 2015 | Goldwater In The News

FAA meets Internet: Ruling on general aviation limits the sharing economy

After the Model T hit the streets, many local governments banned "horseless carriages" from their towns. It's unfortunately common for government agencies to obstruct innovation by failing to adapt their rules to new technologies.

Originally published in San Jose Mercury News

While the Internet is changing the way people live, work, and travel, the Federal Aviation Administration is obstructing such progress in general aviation. In a regulatory order issued to Flytenow, Inc. — a pioneering startup company that operates out of Mountain View — the FAA has practically banned private pilots from using the Internet to communicate their travel plans.

Flytenow.com connects travelers looking for an affordable and novel mode of transportation to private pilots wishing to share travel plans and trip expenses.

Expense-sharing for the cost of flights has been common since the earliest days of aviation, and has been expressly approved by the FAA for over 50 years.

Pilots and passengers have been able to connect using a wide variety of platforms, including e-mail, telephone, word of mouth, or posting flyers on local airport bulletin boards.

Flytenow applied this framework to the digital age by allowing pilots to connect with passengers on the Internet. With seed money and training from the Silicon Valley startup incubator, Y Combinator, Flytenow was ready for its business to take off -- until the FAA did a remarkable 180 degree turn. It told Flytenow and its members that private pilots and passengers can no longer share expenses if they communicate with one another using Flytenow's website.

According to the FAA, if a private pilot flying a four-passenger Cessna uses the Internet to communicate travel plans, that pilot must be regulated under the same provisions that govern commercial pilots flying Boeing 747s.

The reasoning not only strains credulity, it violates decades of the FAA's own regulatory guidance. It is also unconstitutional. Private pilots have a First Amendment right to communicate their travel plans with others. When the FAA restricts private pilots from communicating those plans via the Internet, it violates the free speech rights of Flytenow and its members.

Moreover, in eviscerating any meaningful distinction between private flights on small aircraft and commercial operations like Delta, the FAA squeezes two totally different businesses into the same regulatory framework, offending the Constitution's equal protection and due process guarantees.

The FAA also failed to give any guidance about what types of communications expense-sharing pilots can use. May a private pilot use the phone or e-mail to inform others of travel plans? How about posting those plans on Facebook? Having failed to answer these questions, the FAA enacted an arbitrary and vague rule that cannot withstand constitutional scrutiny.

That's why the Goldwater Institute is representing Flytenow in a court challenge to the order.

A successful outcome in this case will not only allow Flytenow to continue its innovative operations, but will also serve as a bellwether for similar technologies in the burgeoning sharing economy.

From Uber to Airbnb, the power of collaborative technologies is changing our economy and our world. But, too often regulators obstruct the march of technological progress to the detriment of consumers.

In an environment where advancements in communications technology face regulatory overreach at every turn, Flytenow's fight for survival may produce one of the most significant legal precedents of the sharing economy: Consumers and service providers, not regulators, should be free to choose which technologies work for them and which do not.

Author

Jon Riches is the Director of National Litigation for the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation and General Counsel for the Institute. He litigates in federal and state trial ... Read

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