Summary: Who needs a Captain’s license? Anyone carrying passengers-for-hire on federal waters. If you are receiving direct or indirect compensation from your passengers you are required to hold a Captain’s license. Voluntary compensation, such as splitting fuel costs with friends, does not constitute a passenger-for-hire.
There are certainly many State and Federal nuances as to who needs a Captain’s license and what type, but the short-answer is that anyone who is carrying passengers-for-hire needs to have the appropriate Captain’s license. What does a passenger-for-hire mean though? According to the U.S. Code of Federal regulations, a passenger-for-hire is defined as “a passenger for whom consideration is contributed as a condition of carriage on the vessel, whether directly or indirectly flowing to the owner, charterer, operator, agent, or any other person having an interest in the vessel,” and consideration is defined as “economic benefit” (46 CFR 24.10-1). Simply put, a passenger-for-hire is someone who pays some form of economic benefit to a person or entity, for the privilege of being carried on a vessel.
It should be noted that voluntarily sharing in voyage expenses does not make someone a passenger-for-hire as it is voluntary and not a requirement for being on the boat.
When determining whether or not a license is needed, it is useful to ask, “Am I being compensated for carrying this passenger” and “Am I only carrying this person because I’m being compensated?” If the answer to both of these questions is “yes” then a license is required.
The below scenarios are a few common examples of whether or not a license is required.
There are countless scenarios to discuss, and the below are simply meant as conversation starters. *All scenarios assume the boat is operating on federal waters*
- Q: I run a boat dealership and I provide test rides to potential customers. Do I need a Captain’s license to take potential customers out on test rides?
- A: Assuming you are only carrying these potential customers because they might buy a boat and that people buy boats because of these test rides, you are receiving indirect, economic benefit. A license is required.
- Q: I’m taking a friend out fishing and we are voluntarily splitting the cost of fuel and bait. Do I need to have a Captain’s license?
- A: If your friend is voluntarily splitting costs with you and this is not a requirement for you to take them out, your friend is not a passenger-for-hire. A license is not required.
- Q: I often take my neighbors out on cocktail cruises on my pontoon. I never ask that they pay me, but sometimes they buy me dinner as a ‘thank you.’ Do I need a license?
- A: Since you do not require compensation for their time aboard your vessel, a license is not required.
- Q: I have a boat rental. I provide each renter with a 15 minute on-the-water training session. Do I need to have a license?
- A: Yes. Since the renters are providing economic benefit (rental fee) and you would not provide training unless they rented a boat (condition of voyage) a license is required.