The Federal Trade Commission filed a lawsuit Monday towards Uber, alleging the ride-hail and supply big charged prospects for its Uber One subscription service with out their consent. The lawsuit additionally claims Uber didn’t ship the financial savings promised in its subscription service and made it unreasonably troublesome for customers to cancel regardless of its “cancel anytime” guarantees.
Uber has denied any wrongdoing and accused the FTC of speeding the investigation course of and basing its claims on “unvetted allegations.”
The lawsuit comes after the FTC has pushed corporations with subscription providers to make them simpler to cancel underneath its earlier director, Lina Khan. In October 2024, the company finalized its “click on to cancel” rule that requires corporations to make canceling a subscription as simple as signing up for one. Despite dealing with some challenges by trade teams, the rule is predicted to enter impact May 14.
“Americans are uninterested in getting signed up for undesirable subscriptions that appear unattainable to cancel,” FTC Chairman Andrew Ferguson mentioned in an announcement. “The Trump-Vance FTC is combating again on behalf of the American individuals.”
The FTC’s grievance, which follows an investigation that started final yr, alleges that Uber prospects are wrongly promised financial savings of $25 a month.
“Even if that had been true, Uber doesn’t account for the price of the subscription (as much as $9.99/month) when calculating these financial savings,” reads an announcement from the FTC. “The firm additionally obscures materials details about the subscription (for instance, by utilizing small, greyed out textual content which customers can simply miss).”
The grievance accuses Uber of mechanically charging customers who signed up for a free trial earlier than their billing date. It additionally alleges that Uber makes it “extraordinarily troublesome” for patrons to cancel, whereby customers could be compelled to navigate “as many as 23 screens and take as many as 32 actions to cancel.” Those actions come within the type of explaining why they need to cancel, coping with Uber urging them to pause their membership, and if that fails, presenting affords to remain.
“Some customers are instructed they need to contact buyer assist to cancel however are given no method to contact them; others declare that Uber charged them for one more billing cycle after they requested cancellation and had been ready to listen to again from buyer assist,” reads the FTC’s assertion.
Uber clarified that beforehand, prospects who wished to cancel inside 48 hours of their enroll date needed to contact buyer assist to cancel. The firm says that’s now not the case. TechCrunch has reached out to study when Uber up to date its coverage to permit these prospects to cancel throughout the app.
The plaintiffs are pushing the courtroom to ban Uber from persevering with its alleged misleading practices and to power the corporate to pay financial reduction.
“We are disenchanted that the FTC selected to maneuver ahead with this motion, however are assured that the courts will agree with what we already know: Uber One’s sign-up and cancellation processes are clear, easy, and comply with the letter and spirit of the regulation,” an Uber spokesperson mentioned in an announcement. “Uber doesn’t enroll or cost customers with out their consent, and cancellations can now be carried out anytime in-app and take most individuals 20 seconds or much less.”
Tim Muris, a former FTC chair who represented Uber through the case’s investigation interval, accused the FTC of failing to do a full investigation and basing its grievance on “misunderstandings of each the details and the regulation.”
Uber’s present outdoors counsel, Christine Wilson, mentioned, “The unconventional nature of the rushed investigative course of that preceded this enforcement motion was compounded by the addition of latest and unvetted allegations on the final minute. It is disappointing to see the FTC stray from the rigor and equity that has lengthy outlined the company at its finest.”
Uber One’s member base reached 30 million throughout 34 international locations in 2024, and the corporate says it’s rising roughly 60% year-over-year. A yr in the past, Uber CEO Dara Khosrowshahi estimated that Uber One’s membership charges can be “in extra of $1 billion” in 2024.
