Relevant FAA FARs

FAR 91.1: a Pilot in command mean the person who:

1. Has final authority and responsibility for the operation and safety of the flight;
2. Has been designated as pilot in command before or during the flight; and
3. Holds the appropriate category, class, and type rating, if appropriate, for the conduct of the flight.

FAR 91.3: Responsibility and authority of the pilot in command:

1. The pilot in command of an aircraft is directly responsible for, and is the final authority as to, the operation of that aircraft.
2. In an in-flight emergency requiring immediate action, the pilot in command may deviate from any rule of this part to the extent required to meet that emergency.
3. Each pilot in command who deviated from a rule under paragraph (b) of this section shall, upon the request of the Administrator, send a written report of that deviation to the Administrator.

FAR 91.109: No person may operate a civil aircraft in simulated instrument flight unless:

1. The other control seat is occupied by a safety pilot who possesses at least a private pilot certificate with category and class ratings appropriate to the aircraft being flown.
2. The safety pilot has adequate vision forward and to each side of the aircraft, or a competent observer in the aircraft adequately supplements the vision of the safety pilot; and
3. Except in the case of lighter-than-air aircraft, that aircraft is equipped with fully functioning dual controls. However, simulated instrument flight may be conducted in a single-engine airplane equipped with a single, functioning, throwover control wheel, in place of fixed, dual controls of the elevator and ailerons, when:
   1. The safety pilot has determined that the flight can be conducted safely; and
   2. The person manipulating the controls has at least a private pilot certificate with appropriate category and class ratings.

FAR 61.51: A private pilot may log pilot-in-command time only for that flight during which that person:

1. Is the sole manipulator of the controls of an aircraft for which the pilot is rated or has privileges;
2. Is the sole occupant of the aircraft; or
3. Is acting as pilot in command of an aircraft on which more than one pilot is required under the type certification of the aircraft or the regulations under which the flight is conducted.

Example Logbook

Say you and your friend (also a current Private Pilot) are going for a cross country flight. You decide to fly from Lafayette (KLAF) to Peoria, IL (KPIA). You fly the outbound leg and your friend flies the returning leg. You each fly under simulated instrument with the other acting as the safety pilot. While you are flying under instruments, your friend can log pilot in command time, but not cross country time. Your friend will also log Total Flight time and SEL time equal to the amount of Pilot-In-Command time. The same is true for you when your friend is flying. To demonstrate this clearly, your logbooks might look like the ones below. Also note that you would both log night hours for both legs if the flight was conducted at night. Night hours relate to the specific conditions of the flight, not whether or not you were manipulating the controls at the time.

Your logbook:

Your friend's logbook:

A couple of very important things:

1. When you are flying under the hood, you must write the name of your safety pilot in your logbook. You should do the same for your own records when acting as a safety pilot for someone else.
2. When you are the safety pilot, you are responsible for the safety of the flight. If something happens, you will be held accountable. This can have major implications so if you do not want to share the responsibility, then make sure the person flying understands clearly. You will not be designated the pilot in command and will not be able to log the time as such.

Who should pay?

There are two options. The first is simply splitting the total cost of the flight evenly. This is a good method when you're just out having fun and not necessarily worried about time building. This is also good when you have another person(s) riding along that are sharing some of the cost as well. The second and probably fairest is only paying for the airplane when you are in the left seat. This method would make most sense in the scenario discussed above since John Doe decided to do another approach into Lafayette and flew for more time. It wouldn't make sense for John Smith to pay extra because of this.

Regardless of how you decide to share the cost, payment should be discussed and agreed upon by both parties before take-off so there are no disagreements later. Communication is absolutely paramount throughout the entire process. Make sure you and your friend are clear on payment, your responsibilities, and contingency plans. For example, if you are acting as safety pilot and see that you are on a collision course with an aircraft, you would immediately take control of the aircraft and fix the problem. Make sure your friend knows that you would say, "my controls" for example, and he would know to immediately turn them over to you without question or hesitation. Discussing all of this before hand will make flying together much easier and more importantly, much safer.