Founded by Russian "Uber for aircraft" faced with claims and losses in the US

Last spring, Leonardo Galves received an offer from JetSmarter, a company founded by Russian immigrants, which seemed to him very profitable.

CEO and founder of JetSmarter Sergey Petrossov. Photo: JetSmarter

The private jet transportation company offered Galves a VIP membership, which included an unlimited number of free flights on private jets and the opportunity to bring along a guest. JetSmarter membership usually cost 50 000 dollars a year, but the company Galves said that if he takes advantage of a special short-term offer, he can get 3 of the year for 97 500 dollars, the man agreed, writes NBC.

A few weeks later, Galvec was shocked when he tried to book a flight through the JetSmarter. Instead of the promised free flight, the man was told that he would have to pay 75% of the cost of his flights, the right to invite a guest and other benefits also disappeared.

“My heart sank. My membership didn't mean anything anymore. It was the easiest money I’ve ever lost in my life,” the man admitted.

Galves filed a claim against JetSmarter for damages and damages. JetSmarter declined to comment on any specific lawsuits, but said in a statement that “changes to the service provided and benefits for subscribers were within a membership agreement,” which states that the company can “change, suspend or terminate” the services or benefits at any time.

As journalists found out, many JetSmarter clients experienced the same unpleasant experience as Galves. More than five years after the launch of the company that promised to become “Uber for private jets”, JetSmarter has a huge list of disappointed former clients and at least 13 lawsuits. While some clients are satisfied with the services of the service, many others call it activity fraud and illegal profit, according to lawsuits against the company.

Journalists interviewed dozens of JetSmarter subscribers, more than 20 former employees and a wide range of suppliers and partners of the company. They also got access to internal documents, messages and presentations for investors, videos and photos from passengers and members of the JetSmarter team.

What looks like a fast-growing startup that promised a revolution in aviation travel was in fact a company losing millions of dollars a month and not fulfilling promises to customers and investors. Thanks to such famous clients as Kim Kardashian and DJ Khaled, as well as an ambitious young CEO, JetSmarter became the first “flying start-up”, which was valued at more than 1 billion dollars. Now the company is worth less than one-fifth of this amount, based on the last round of investment.

Hiding behind an elite image, JetSmarter uses legal threats and lawsuits to silence critics, customers, and the media. The company sent letters to journalists demanding to stop communicating with its former and current employees, citing the fact that they signed a non-disclosure agreement.

In a statement, JetSmarter stressed that "categorically rejects any allegations of fraud." The company stressed that, like any startup, it is going through a transitional period in business and is building “more positive predictions about business health than ever.” JetSmarter acknowledged that "a number of subscribers are unhappy with certain changes," but added that "the vast majority of our main customers understand the need for these solutions to ensure the long-term viability of JetSmarter."

However, after the company abandoned its original business plan, its path to profitability remains uncertain. She faced costs due to lawsuits and compensation, as well as problems due to a class action lawsuit filed for arbitration in Florida.

JetSmarter also faced questions from two federal agencies - the Federal Aviation Administration and the FBI. The nature and scope of the requests are unclear, but one person interviewed by the FBI about JetSmarter said that he was asked about the company's financial and business methods. The startup stated that the company itself is not the subject of an investigation by the FBI.

Service for booking tickets for private jets JetSmarter was founded by a native of Moscow, Sergei Petrossov in Florida. And in the first years of its work it could boast of enormous success, huge investments and high costs - in 2016, a startup was estimated at $ 1,5 billion.

Sergey Petrossov's parents immigrated to the United States when he was 4. Petrossov had several IT projects in the USA and Russia.

He founded a technology project - LiveContact, aimed at Western Europe and offering sites to organize customer support through chat, audio and video. Another of his start-ups - the Federal Distance Education System was one of the first in the field of online education in Russia. But due to the bureaucratic processes in Russia, Petrossov handed it over to the state and left the project.

Even then, he used charter flights for flights, but the process of booking such flights, he said, was very long and complicated. A fax was used for this, which reminded the businessman of the “80's Exchange”. That is how the idea of ​​creating JetSmarter - "Uber for aircraft".

“The analogy between JetSmarter and Uber is that both services allow you to quickly and conveniently book a flight in a mobile application. With us you can do it in a few minutes, bypassing the chain of brokers, and fly away within a few hours. We calculate the availability of flights in real time, based on information directly from the airlines, ”said Petrossov.

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