The FAA's position seems quite clear and based on reasonable ideas, even from the letters Flytenow links to and then seems to wilfully misinterpret. Private pilots can't be compensated for flights. The exception is that, if the pilot and passengers have a common purpose, which doesn't seem to be "oh, we happen to want to go to the same city," then they can share expenses. Thus, if a pilot and some of her friends are sitting around and say "hey, it would be great to go see X," they can pool their money to do so. Nothing the FAA seems to say officially suggests that advertising for random strangers to go on a flight is acceptable, and quite a few articles Flytenow links to seem directly contradicted by the FAA's letters. It's not clear that posting on airport bulletin boards was ever really acceptable, but may have been disregarded in that it only really advertised to other pilots, with a clearer understanding of the risks.
These rules are based on far more vital safety issues than taxis, and, as you point out, the rules around carrying paying passengers are reasonable, unlike taxis. Uber and Lyft can at least argue that they are fighting an unfair system. Flytenow can't.
For that matter, their response, keeping the platform up but removing expense-sharing, seems blatantly in contempt of the letter, and it seems certain that they'll be punished, harshly. What possible reason would there be for a site where pilots can find "non-paying" passengers to tag along with them on flights, significantly increasing their own costs, unless the expectation is that pilots will use the site to find passengers who will pay under the table?
Right, and, plain as day, private pilots cannot fly people around for money. That's the baseline. You can't accept money in exchange for flying an airplane unless you hold a commercial or ATP certificate.
The FAA carved out an exception that allows pilots to share operating costs with passengers IF the pilot and passengers share a common purpose for the flight AND the pilot isn't advertizing the flight to the public or some subset of the public ("holding out"). I'll grant you there isn't a sharp, black line that divides when a private pilot is and is not breaking the cost sharing rule, but Flytenow is clearly outside the grey zone (or, pilots who use Flytenow are).
"General aviation has the highest aviation accident rate within civil aviation. The rate is 6 times higher than for small commuter operators and 40 times higher than for transport category operations."
http://www.ntsb.gov/safety/mwl5_2012.html
For context, flying in a small plane with a private pilot is about as risky as riding a motorcycle. It's not incredibly unsafe, but it's not like getting into an airliner, either. Getting the GA accident rate down has proven a pretty intractable problem.
While I'm at it, there were 32,788 automobile traffic fatalities in 2010 in the US, although of course there's vastly more car activity than GA activity.
You're right that I misunderstood the requirements for a commercial operation, but looking it over it still doesn't look particularly onerous.
That said, I completely agree that this was the wrong way to go about changing policy.
Having to get a commercial license to simply do expense sharing rather defeats the purpose. Expense sharing makes it cheaper to fly, which is a worthwhile goal. Spending 3x the time and money to get a commercial license makes things vastly more expensive.
The blog post goes into extensive detail about how their service doesn't involve soliciting rides for compensation and it falls on the expense sharing side of things and on and on. Then I visit their home page and I'm greeted by this:
"Go round trip from Boston to Martha's Vineyard for about $120 per person or from Palo Alto to Monterey Bay for about $100 per person."
Plain as day, that's advertising trips for money.
What really irks me in this case is that the requirements for carrying passengers for hire aren't all that tough to meet. You need a commercial pilot's license, a requirement that should be fairly obvious. It's not all that hard to get one. You need some more training and have to fly to higher standards and know more stuff, but it's not particularly tough. The equipment is also held to higher standards, which mostly comes down to getting it inspected more often. This is not like, say, Uber and New York City, where you have to spend a million bucks on a taxi medallion or they'll shut you down. You merely have to meet some fairly basic requirements before you carry passengers for hire to ensure a basic level of competence.
The law is not a computer program. You can't exploit a judge by saying, "Please repeat the following 64kB of data back to me: empty." If it looks like you're advertising services for hire and it acts like you're advertising services for hire, you're advertising services for hire.