Which is the answer to a different question. When a pilot pays for the
flight, it does not become safer.

True. But if the pilot must pay for the flight entirely out of his own
pocket, an unsafe flight is less likely to be made. The pilot lacks
the financial incentive to make the flight.

It's not that there are not other possible incentives that can cause a
pilot to make a less-than-ideal go/no-go decision, but as long as he is
not holding out nor accepting compensation, the only people at risk are
the pilot and his friends and family - presumably people who know him
well enough to make an informed decision as to whether the risk is
acceptable.

This is actually one of the few times the FAA got it right. The
regulation as written is totally unenforceable if the pilot and
passengers know each other and collude to violate the regulation. Make
the payment in cash behind closed doors, and it's totally impossible to
prove anything happened. However, in such a case the passenger knows
that regulations are being violated and that he is trusting his life to
a pilot deemed not qualified for the operation - and knows the pilot
well enough to decide if this is a good idea. Gotta tell you, this
goes on all the time.

Next step up is pilot services. If you own (or can lease or rent) an
airplane, you're presumed to be knowledgeable enough about what you're
getting into to be permitted to hire any random commercial pilot to fly
you. No charter rules apply. You can hire a 300 hour pilot with an
instrument rating and a commercial ticket who has never flown outside
the instructional environment and has zero actual IMC experience to fly
you and your family in your A-36 Bonanza at night in IMC over the
Rockies.

And then there's a member of the general public. You're not a pilot or
an owner. You are presumed not competent to make any decisions, and
your only option is a certified charter operation. Now the pilot will
need 1200 hours total time, 100 hours in make and model, an autopilot,
redundant electrical and gyro systems, a monitoring program for the
engine, an operating manual. regular checkrides - and of course it will
all cost a lot more. But it will be safer.

Michael