The Federal Trade Commission Files Lawsuit Against Uber for Alleged Deceptive Practices
The Federal Trade Commission (FTC) has taken legal action against Uber, accusing the company of charging customers for its Uber One subscription service without their consent. The lawsuit, filed on Monday, also alleges that Uber failed to deliver the promised savings to its subscribers and made it overly challenging for users to cancel their memberships despite the company’s “cancel anytime” claims.
Uber has vehemently denied any wrongdoing and has criticized the FTC for what it perceives as a rushed investigation process based on what it calls “unvetted allegations.”
The FTC’s legal action against Uber comes in the wake of the agency’s efforts to make subscription services more consumer-friendly under the leadership of former director Lina Khan. In October 2024, the FTC finalized a “click to cancel” rule aimed at ensuring that canceling a subscription is as easy as signing up for one. Despite facing opposition from industry groups, the rule is set to take effect on May 14.
FTC Chairman Andrew Ferguson stated, “Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel. The FTC is taking a stand on behalf of the American people.”
The FTC’s complaint, following a year-long investigation, alleges that Uber customers were falsely promised savings of $25 per month. The agency claims that Uber failed to account for the subscription cost (up to $9.99/month) when calculating these savings and used misleading tactics, such as small, greyed-out text, to obscure crucial information about the subscription.
Among the allegations in the complaint is that Uber automatically charged customers who signed up for a free trial before their billing date, and made it excessively complicated for users to cancel their memberships. Users were reportedly required to navigate through as many as 23 screens and take up to 32 actions to cancel, including justifying their decision, dealing with Uber’s attempts to dissuade them from canceling, and being presented with offers to retain their membership.
Uber has clarified that customers previously had to contact customer support to cancel within 48 hours of signing up, but this is no longer the case. The company claims that cancellations can now be done within the app in under 20 seconds.
The plaintiffs are seeking to halt Uber’s alleged deceptive practices and secure monetary relief from the company.
An Uber spokesperson expressed disappointment with the FTC’s legal action, asserting that Uber One’s sign-up and cancellation processes are straightforward and compliant with the law. Former FTC chair Tim Muris, who represented Uber during the investigation, criticized the agency for what he described as a lack of thorough investigation and misunderstanding of the facts and the law.
Uber’s current outside counsel, Christine Wilson, lamented the rushed and unconventional investigative process leading up to the enforcement action, which included the introduction of new and unverified allegations at the last minute.
In 2024, Uber One boasted a membership base of 30 million across 34 countries, with the company reporting a 60% year-over-year growth. CEO Dara Khosrowshahi had estimated that Uber One’s membership fees would exceed $1 billion in 2024.
