So I Flew In An “Uber For Tiny Planes” (opens in new tab)

  Under current FAA regulation 14 CFR 61.113 private pilots 
  can’t accept payment for taking passengers on previously 
  unscheduled flights.
  
  The way Flytenow works around this is getting passengers 
  to pay them and not the pilots. Pilots do receive money 
  for the flight, but it’s simply for splitting the cost of 
  gas and maintenance on a flight the pilot was already 
  going to take anyway. Think of it like getting a ride with 
  someone and paying some gas for the lift.

The FAA are going to crush them. This is obviously, obviously!, flight for hire. This spits in the eye of the spirit of the law. Even if the FAA decides not to do its job, the first fatal accident will end the company.

Contrary to other comments, splitting costs is perfectly legal for private pilots under FAR §61.113(c)

The fact that an intermediary allows the pilot and the passengers to find each other, or acts as an escrow service to ensure payments are made, is irrelevant.

§61.113 Private pilot privileges and limitations: Pilot in command. (a) Except as provided in paragraphs (b) through (h) of this section, no person who holds a private pilot certificate may act as pilot in command of an aircraft that is carrying passengers or property for compensation or hire; nor may that person, for compensation or hire, act as pilot in command of an aircraft.

(c) A private pilot may not pay less than the pro rata share of the operating expenses of a flight with passengers, provided the expenses involve only fuel, oil, airport expenditures, or rental fees.

Like Uber and Airbnb, this type of model is compelling because it takes a close look at regulatory requirements and challenges existing assumptions while still following the letter, if albeit not the spirit, of the rules. I'm a fan - the FAA and certain interested groups will likely challenge their legality, but if executed correctly this is exactly the type of startup that can fundamentally change an industry.