Some very rich people are quite upset with a start-up company that hasn’t delivered what it promised.
The Product
JetSmarter is a start-up company based in Florida that is trying to be Uber for private jets. It raised $105 million from investors, including the Saudi royal family and Jay-Z.
Essentially, the company is just an app — it doesn’t actually own any jets. It works by connecting the user with a private jet. A user can book either their own plane to themselves, or find an empty seat on a private jet. They also offer helicopter rides, as well.
The Cost
The company, which launched in 2013, charges $10,000 per year for its base membership and up to $50,000 per year for its exclusive memberships.
Brand Ambassadors
To spread the word about the app, JetSmarter hired celebrities to be brand ambassadors. One of them was Kim Kardashian, who posted a video to Twitter in 2016 talking about how much she loves the app and that it has changed her traveling life. She did not disclose in the tweet that she was paid for it.
Unhappy Customers
Now the company is experiencing blowback from unhappy customers who claim JetSmarter isn’t delivering what it promises.
Backstreet Boy Nick Carter is one such customer. He says he paid the company $15,000 for a one year membership, but his one and only flight was so horrible that he never used it again. When he tried to cancel his membership and get a refund, JetSmarter refused. Carter says he feels like he was taken advantage of.
Losing Money
JetSmarter is reportedly losing a lot of money. A CNBC investigation found that in 2016 and 2017 it lost an average of $5 million per month. Part of the reason may be that customers are complaining of bait-and-switch tactics. They get certain services when they sign up, but those are then taken away .
Since 2016, free flights for new members have been removed, surcharges added to longer flights and the previously free helicopter service and catering eliminated.
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‘I said to them that basically, this is what they call a bait and switch,’ David Micciulla, who joined JetSmarter in 2017 with a $9,000 membership, told CNBC.
JetSmarter denies these allegations and says the majority of its customers are happy.
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