JetSmarter plans expansion despite new lawsuits, including from one customer who paid $87,500

The latest lawsuits bring to at least five the number of actions alleging fraud against the Ft. Lauderdale-based sharing economy private jet membership service

 

As a lawsuit seeking at least $2 million against it continues with a hearing scheduled for early December in Los Angeles, JetSmarter has been hit with two more lawsuits. The first one was filed October 16^th in The United States District Court For The Eastern District Of Wisconsin, at least the fourth since August, and accuses the Fort Lauderdale-based sharing economy private jet service with breach of contract, breach of good faith and fraudulent representation. The lawsuit seeks at least $75,000 in compensatory damages, undisclosed punitive damages, attorney’s fees and other relief that the court deems proper. In another lawsuit, filed today in the Southern District of Florida, Illinois-based Joann Bachewicz is seeking at least $300,0000 after she paid $87,500 for a three-year membership JetSmarter represented as having a $150,000 value. 

 

In both new lawsuits, the storyline follows closely the California action and two lawsuits filed in New Jersey, one of which was settled within days of its filing. They mirror complaints JetSmarter members have been making on review sites and chat boards over the past year. The Wisconsin actions states sometime in December 2016 plaintiffs Jason and Andrea Abraham began a sales dialogue with a JetSmarter salesperson. In the filing, they claim they were told if they enrolled in a membership before January 1, 2017, they would receive benefits that included complimentary flights over three hours in flight time with no additional fees.

 

Based on that and other promises the Abrahams enrolled in an annual membership paying $26,500. In May of 2017, their salesperson, Sam Kimmell, pitched a three-year membership at a discounted rate for the same benefits included in their annual membership plan if they paid the entire amount, which they did, for a payment of $21,877.28 per membership, extending them until August 12, 2020.

 

The Abrahams, according to the filing, reside about two hours drive from Chicago’s Midway Airport where JetSmarter’s scheduled shared flights had been operating. When they tried to book flights with free seats this September they allege they were no longer available. A flight from Chicago to Fort Lauderdale, a route the Abrahams utilized regularly, was only accessible if they paid $2,990 per person they say. The complaint adds the Abrahams then discovered that “they are now required to book a minimum of approximately ten seats in order to fly on a large jet and that the option to book seats on a light jet is not available at all anymore.”

 

According to the filing, “The new conditions and requirements are contrary to the express representations by the defendants, Jetsmarter and Sam Kimmell, in their marketing and advertisements assuring…there would be no additional fee to use Jetsmarter’s services.”

 

Like other lawsuits, the Abrahams assert the additional charges “were so significant” they were unable to utilize the membership for their flights and “to which the availability of included flights greatly influenced their decision to purchase their respective Jetsmarter memberships.”

 

The Abrahams said they “would never have entered into a membership that required them to go so far out of their way to utilize its services without the promise of the free shuttle benefits for which they initially bargained.” Before JetSmarter changed its pricing and availabilities, the lawsuit says the Abrahams were to take flights valued at $663,660 by JetSmarter.

 

The filing says that finding they couldn’t use the service anymore, they tried to reach a resolution and were told that in mid-September a transition offer was going to be made to current members, something they never received. They said at that point JetSmarter stopped responding to them.

 

For Bachewicz, the lawsuit presents an even more troubling picture of how the company was still hawking its most expensive memberships at the same time it was pivoting from an all free flights for members model to where some flights required extra payments, and today, where you don’t have to be a member to fly with it, and all memberships are required to pay for seats on flights.

 

According to the Bachewicz filing, she was promised free flights under 3.5 hours from her Chicago base; free flights for up to three guests on all Jetdeals; a 15% discount for all other seats utilized; the addition of more flights from the Windy City over the next few months, and free helicopter ride from Westchester County Airport into Manhattan.

 

After Bachewicz signed up, she was told that the helicopter flights had been discontinued the year before. And from her Chicago base, like the Abrahams, not only was there a lack of flights with seats she could book for free, but virtually all flights with single seats available for purchase evaporated. She calculated that based on her intended flying patterns she would have needed to spend $87,000 per month if she wanted to use the JetSmarter membership she had purchased. Abrahams says she attempted to obtain a return of her purchase price, but JetSmarter has refused.

 

The lawsuit states, “Within a couple of months for enrolling in a three-year program with Defendants, Plaintiff discovered that the programs as sold to her were no longer available and that she would be required to purchase flights in the future. This, along with other components of the purchase which vanished, was contrary to the express representation made by Defendants in their marketing and advertising.” JetSmarter continues to list on its website routes from Chicago to South Florida, Los Angeles and New York as “popular route” as seen below.

However, research by Private Jet Card Comparisons checking the JetSmarter website did not find a single flight during November and December (below) where members could buy a confirmed single seat. In fact, most options, as the Abrahams lawsuit alleges, now require buying multiple seats, in several cases for more than what it would cost to charter an entire aircraft via more traditional on-demand charter.

 

Instead of being able to buy single seats, when one clicks through the prices listed on its website (above) you find the options are to create flights requiring the purchase of multiple seats. For example, on November 5th from Chicago, the two options were to buy six or 10 seats (below) costing $14,970 for a light jet and $25,950 for a heavy jet.

For the same date, online broker Stratajet offered us an eight-seat Citation V for $11,687.

It was the same thing when we checked Chicago to South Florida, receiving only an option to book a 10-seat heavy jet and requiring us to buy all 10 seats for a total of $34,950 (below).

Through Stratajet we were able to quote a midsize seven-seat Hawker 800 for $21,216, $13,743 than JetSmarter wanted.

While once you start a flight, you can then try to sell off seats you don’t need, a downside of creating the flight and taking the risk for unsold seats is once you start a flight, you can’t cancel or change the flight time. You would also be paying dramatically more than what the airlines are selling first class seats for on the same date. According to Google Flights, you can fly in the front of the bus on those same routes starting and $230 and $300 respectively (below), some 90% less than what a single seat on JetSmarter would have cost if you could have even bought one.

Despite complaints, and having no flights scheduled where current members can buy confirmed single seats for many routes the company continues to promote on its website, on Tuesday JetSmarter issued a press release (below) announcing new routes. This time it says it will offer flights between South Florida – Washington D.C., South Florida – Boston, New York – Orlando, New York – Naples / Fort Myers, New York – Tampa, Hartford – South Florida, Jacksonville – South Florida, Tallahassee – South Florida, Naples / Fort Myers – South Florida, and Boston – Washington D.C.

 

 

In the release, JetSmarter CEO Sergey Petrossov said, “This is a homerun for the JetSmarter community. The new product will allow for more flight creations between even more cities, giving new travelers the opportunity to experience JetSmarter’s service. The product is useful for both business and leisure travelers, as they’ll be connected with other users flying to conferences, corporate events, vacations, concerts, or sporting events, at a more affordable rate.”

 

JetSmarter says these flights will be crowdfunded and will only take off if a specified number of passengers sign up. In describing the offering, the press release stated, “Historically, flight creators would cover the costs of the flight and would control the departure date and time, allowing flight finders to purchase a seat on existing flights found in the app or on the website. Through the crowdfunded option, both the creators and finders have the opportunity to initiate flights by booking only one seat and can cancel at any time before the flight is confirmed. By lowering the entry-price to create flights down to one seat, all users alike in the JetSmarter community can now initiate flights which will lead to infinite flight opportunities.”

Download a copy of Joann Bachewicz’s lawsuit against JetSmarter filed October 25, 2018

Download a copy of the Abraham’s lawsuit against JetSmarter October 16, 2018