I'm glad that Short Bus Drive pointed to Mangiamele - that's the one that says that there can be no employer reimbursement; that the "incidental" exception to the no compensation rule - 61.113(b) - is a "pilot only" rule; no other passengers allowed (so, sorry jheath - your scenario won't fly - you were taught the way most understood it, until Mangiamele).

Splitting costs isn't under (b); it's under (c). Under 61.113(b), the employees can decide to split the operating costs of the flight equally. Period. No reimbursement by the employer.

Big problem (strictly IMO): this is all part of the same overall policy of protecting travelers and protecting investment in higher training and regulation requirements that marks the difference between private and commercial pilots and private and commercial operations. The policies are good but for a reg that's intended to apply to private pilots, it gets unnecessarily complicated.

Yes - thanks to Short Bus and NGDI - those rulings and your comments were fairly clear to me and much how I *thought* things were without understanding it as deeply as the rulings poiint out. I remember flying a few friends down to a weekend cabin and they paid for the rental. I found out soon after that I had done it wrong since I didn't pay a full pro-rated cost. Live and learn.
As to the OP's initial question - I think those references provided by Short Bus pretty much sums it up.

USMCFLYR

With all things being the same if the pilot had a commercial ticket it would be a non-issue correct?

The worst thing is if anything happens you or your family will loose everything in the coming lawsuits!!!

This would be incorrect. I don't have my regs with me but there are a dozen or so things a commercial pilot can do under his licence by himself. The scenario as is, he would have to be certified under some section (91,135, 121) and have a training course approved by the FAA to do it. The only way a pilot can take someone somewhere is if the pilot is going there first and invites people along. If someone else says "can you take me to..." that is "holding out" for business in the FAA sense. Even if they don't pay for anything. The FAA says that flight time by itself is compensation for the pilot.

The "incidental" means that the guys meeting is far enough away, and he chose to fly instead of drive. It is just a means to get there, not a reason for the business, to fly. Funny enough, according to the interpretation, the guy can fly himself, but he cannot take any coworkers with him, unless they all pay their share, and the company does not reimburse them.

Clear as mud?

It is pretty clear in the AC. What people don't tend to discuss much is private vs. common carrige. The former you can do as a commercial pilot, the latter you can't. You can't conduct scheduled or unscheduled air transportation that would fall within the applicable regs (and require an operating certificate). You can surely take a passenger somewhere and get paid, but said AC says you have business relationship on a "long term basis" with said customer, so this usually means you are someone's or some businesses pilot, and picking people up off the street at random is not a "long term (business relationship) basis". People get all worked up about "holding out", which is acting as, or demonstrating the willingness to act as a common carrier, but I think the commom vs. private is a little more important to define, and yep there are the other things you can do like the banner towing and so on.

That's because the AC's implications about private carriage are pretty much out of sync with reality. There are, for example private carriage certificates issued under Part 135. And, if you read the FAA Chief Counsel opinions and NTSB decisions in this area, the amount of "holding out" that meets the test for what is considered "public" is so small as to be insignificant.

So far anyway, I have not come across a single FAA or NTSB decision where an operation that involved carrying persons or property for a fee in an aircraft owned or in operational control of a pilot was considered to be "private carriage" that did not require an operating certificate.

Carrying persons or property for compensation in an aircraft over which you have "operational control"? Unless you fit comfortably into one of the exceptions provided by 61.113 or 119.1, I think there is a risk of successful certificate action.

Hmm, I wasn't assuming the aircraft was owned by the pilot or that the passenger was directly paying the pilot, but how many "private carrige" operations are there operating under part 91? In fact, isn't that much of business aviation?