Against the backdrop of three more lawsuits, the sharing economy private jet company is responding, saying programs changes were within its rights, and the “vast majority” of “core” members are understanding
Over the past two weeks, at least three more lawsuits have been filed against JetSmarter, including two customers who say shortly after spending $97,500 upfront for discounted multi-year memberships they found themselves without the benefits they paid for. The lawsuits filed in New Jersey, Illinois and New York each allege shortly after joining or renewing key benefits they were promised were no longer available. With the mounting lawsuits, in general, they detail a series of back and forth communications with JetSmarter employees as benefits were being changed, and after failing to receive a refund or satisfactory solution, in each case, the members decided to take JetSmarter to court.
The most recent cases are linked below if you are interested in reading them:
One point that came up for the second time in the Edward Liceaga lawsuit was JetSmarter’s use of celebrities such as Kim Kardashian and Petra Nemcova in promotions. An ongoing case in Los Angeles alleges both the celebrities and private jet broker failed to disclose that there was a business relationship, which could possibly violate rules governing influencers issued by the Federal Trade Commission as well as misleading advertising statues. Between the lawsuit being filed, my report and a follow-up by The Miami Herald, Kardashian added the hashtag #ad to her post.
Now, for the first time that I am aware of JetSmarter has issued a detailed response to the mounting lawsuits. It comes after I posted a story about what I saw as the shortcomings of their on-demand charter offering, which now with its pay by the seat flight crowdsourcing focus seems the way forward.
Over the first several years, the benefits of a JetSmarter membership included the ability for members to grab unlimited free seats on a significant number of scheduled private jet flights. As of August, the company was claiming at least 100 flights per week put on mainly through a combination of the company underwriting the flights and members who would start their own flights, typically buying two to six seats to confirm the flight, then letting other members and non-members book the additional seats.
In the early days, members also had the ability to get the entire aircraft for empty leg flights at no additional cost to their annual membership. Even several of the lawsuits acknowledge that initially, the company delivered on the benefits promised, and while there were questions on how the model could make money, there were lots of happy members.
However, in the last two years, as JetSmarter implemented both incremental and significant changes, the griping has turned to litigation. I’ve covered it fairly closely, and after JetSmarter told me they wouldn’t respond to my requests for comments in three recent instances, I didn’t contact them before the piece on their on-demand charter program. After publishing the article, JetSmarter CEO Sergey Petrossov reached out to me asking to provide a response, which I added to the story.
He also asked me to reach out for comment in the future, and with three more lawsuits on my desk, I did. In response, a JetSmarter spokesperson provided the following statement:
“As a leader in private aviation, we are constantly looking to improve in-flight services, customer standards and our business model. Changes that were made to our member services and benefits were well within the rights of our membership agreement, and any legal action against JetSmarter is completely meritless. We will defend ourselves vigorously against these claims, which represent less than 0.1% of our growing customer base.
“Our legacy members still have access to complimentary seats and incremental discounts over and above new members. We recognize and appreciate that a number of members are unhappy with certain changes. However, these changes benefit our entire customer community, not just isolated groups, by improving availability and lowering the price of member-initiated/crowdfunded flights, improving in-flight service quality by reducing total passenger count per plane, providing complimentary gourmet catering, and most importantly elevating the quality of people flying together.
“The vast majority of our core customers understand the necessity of these decisions to ensure the long-term viability of JetSmarter. Today, we are more positive about the health of our business than ever, and since opening up the JetSmarter platform to members and non-members in June, our current paying customer base (members and non-members) has continued to increase.”
It should be noted, the current JetSmarter offer in terms of booking seats on flights entails non-member rates and memberships currently selling for $2,500.
In other JetSmarter litigation news, in New York, the company filed a motion seeking to have a lawsuit filed by Leonardo Galvez dismissed and moved to arbitration as part of its membership agreement. Earlier this month a judge in Los Angeles denied a similar motion.
In the meantime, JetSmarter has been rolling out a plethora of crowd sharing routes where the flights only go if a preset number of members and non-members book seats.
From Atlanta, 11 new destination for the crowdsourced flights includes New York, Washington D.C., Boston, South Florida, Tampa, Naples, Orlando, Chicago, Las Vegas, San Francisco, Los Angeles, Scottsdale, and Colorado. From Chicago, the company is looking to generate crowdsourced flights to and from New York, Washington D.C., Boston, South Florida, Tampa, Naples, Orlando, Atlanta, Las Vegas, San Francisco, Los Angeles, Scottsdale, and Colorado.