Feds Slam Uber Over Unauthorized Subscription Charges to Customers
The Federal Trade Commission (FTC) has initiated legal action against Uber, alleging that the ride-hailing and delivery service improperly charged customers for its Uber One subscription without their consent. This lawsuit highlights concerns over consumer rights and subscription management, as it asserts that Uber failed to provide the promised savings and complicated the cancellation process, despite claims of allowing users to cancel “anytime.”
FTC’s Allegations Against Uber
The complaint, filed on Monday, claims that Uber’s subscription service misled customers regarding savings and made it excessively difficult to opt out. According to the FTC, Uber customers were misled into believing they would save $25 a month. However, these savings do not factor in the cost of the subscription, which can be as high as $9.99 per month.
Challenges with Cancellation Process
- Customers reportedly face up to 23 screens and 32 actions to cancel their subscriptions.
- Users may need to justify their cancellation, often encountering pressure to pause their membership instead.
- Some customers claim they were charged for additional billing cycles despite requesting cancellations.
This complex process raises questions about transparency in subscription services. The FTC’s investigation began last year, reflecting ongoing scrutiny over subscription service practices, particularly under the leadership of former director Lina Khan.
Background on Subscription Regulations
In October 2024, the FTC finalized its “click to cancel” rule, mandating that companies make cancellation as straightforward as signing up. This regulation is designed to protect consumers from unwanted subscriptions that are challenging to cancel.
Uber’s Response to the Lawsuit
Uber has denied the allegations, asserting that the FTC rushed the investigation and relied on “unvetted allegations.” An Uber spokesperson remarked, “We are confident that the courts will agree with what we already know: Uber One’s sign-up and cancellation processes are clear, simple, and comply with the law.”
Consumer Protection Advocacy
FTC Chairman Andrew Ferguson emphasized the need for consumer protection, stating, “Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel.” This sentiment underscores the importance of transparent business practices in the subscription economy.
Future Implications for Uber
As of 2024, Uber One boasts a membership base of 30 million across 34 countries, with a projected revenue exceeding $1 billion. This lawsuit may have significant implications for the company’s operational practices and consumer trust.
For more information on subscription services and consumer rights, visit the FTC’s consumer education webpage.
