Uber Sued by FTC: Unauthorized Subscription Charges

FTC Sues Uber Over Alleged Subscription Deceptions

The Federal Trade Commission initiated legal action against Uber on Monday, asserting that the ride-hailing and delivery service levied charges for its Uber One subscription without obtaining explicit customer consent.

Furthermore, the lawsuit alleges a failure to deliver the promised cost savings associated with the subscription program, coupled with an unduly complex cancellation process despite assurances of “cancel anytime” flexibility.

Uber's Response and FTC's Prior Actions

Uber has refuted these allegations, contending that the FTC expedited the investigation and based its claims on unsubstantiated assertions.

This legal challenge follows the FTC’s broader effort, under former Director Lina Khan, to simplify subscription cancellations. In October 2024, the agency finalized its “click to cancel” regulation, mandating that cancellation procedures be as straightforward as the initial subscription signup.

Despite opposition from industry associations, this rule is slated to take effect on May 14th.

Statements from FTC Leadership

“Consumers are increasingly frustrated by unwanted subscriptions that prove difficult to terminate,” stated FTC Chairman Andrew Ferguson. “The Trump-Vance FTC is actively defending the interests of American consumers.”

Details of the FTC Complaint

The FTC’s complaint, stemming from an investigation launched last year, claims that Uber customers were incorrectly led to believe they would save $25 monthly.

However, the FTC points out that Uber does not factor in the subscription cost—potentially up to $9.99 per month—when calculating these purported savings.

Obscured Information is also a key concern, with the FTC noting the use of small, greyed-out text that consumers may easily overlook.

Cancellation Difficulties Alleged

The complaint further alleges that Uber automatically charges users who enrolled in free trials before their billing cycle began.

It also asserts that canceling a subscription is “extremely difficult,” potentially requiring users to navigate up to 23 screens and complete as many as 32 actions.

These actions include providing reasons for cancellation, resisting persuasive offers to pause membership, and being presented with incentives to remain subscribed.

The FTC’s statement details instances where users were instructed to contact customer support for cancellation but were not provided with contact information, or were charged for another billing cycle after submitting a cancellation request.

Uber's Clarification on Cancellation Policy

Uber has clarified that it previously required customers seeking cancellation within 48 hours of signup to contact customer support.

The company maintains that this is no longer the case, and TechCrunch has requested information regarding the date of this policy update.

Remedy Sought by the FTC

The plaintiffs are requesting the court to halt Uber’s alleged deceptive practices and to mandate financial restitution.

Uber's Defense

“We are disappointed by the FTC’s decision to pursue this action, but are confident that the courts will validate what we already know: Uber One’s signup and cancellation processes are transparent, simple, and fully compliant with the law,” stated an Uber spokesperson.

“Uber does not enroll or charge consumers without their consent, and cancellations can now be completed in-app in approximately 20 seconds.”

Criticism of the FTC Investigation

Tim Muris, a former FTC chair representing Uber during the investigation, criticized the agency for conducting an incomplete investigation and basing its complaint on “misunderstandings of both the facts and the law.”

Christine Wilson, Uber’s current outside counsel, expressed concern over the “rushed investigative process” and the inclusion of “new and unvetted allegations” at the last minute.

She lamented the FTC’s departure from the “rigor and fairness” historically associated with the agency.

Uber One's Growth and Revenue

In 2024, Uber One’s membership reached 30 million across 34 countries, with the company reporting approximately 60% year-over-year growth.

A year prior, Uber CEO Dara Khosrowshahi projected that Uber One membership fees would exceed $1 billion in 2024.