FTC Sues Uber Over Deceptive Practices

The Federal Trade Commission (FTC) has filed a lawsuit against Uber, alleging that the company engaged in deceptive billing and cancellation practices related to its subscription service, Uber One.

Background of the Complaint

In its complaint, the FTC claims that Uber enrolled customers in its subscription service without their consent and billed them prematurely, even during free trials. Furthermore, despite promising that customers could "cancel anytime," Uber made the cancellation process unnecessarily complicated. Some users had to navigate through up to 23 screens to cancel their subscriptions, while others were directed to contact customer support without being provided with a means to do so. Even for those who managed to get through to customer support, some were still charged for another cycle while waiting for a response.

Statement from the FTC Chairman

FTC Chairman Andrew Ferguson stated, "Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel. The Trump-Vance FTC is fighting back on behalf of the American people. Today, we’re alleging that Uber not only deceived consumers about their subscriptions but also made it unreasonably difficult for customers to cancel." This action underscores the FTC’s commitment to protecting consumers from deceptive business practices.

Alleged Violations

Uber has allegedly violated the FTC Act and the Restore Online Shoppers’ Confidence Act. The FTC’s complaint also disputes Uber’s claim that its subscription service saves customers $25 a month. According to the FTC, this figure does not accurately reflect the benefits of the subscription, as it fails to account for the monthly cost of the subscription itself. Currently, Uber’s website claims that members save an average of $27 per month.

Response from Uber

In response to the allegations, Uber spokesperson Noah Edwardsen denied the FTC’s claims, stating that the company’s processes "are clear, simple, and follow the letter and spirit of the law." Edwardsen added, "Uber does not sign up or charge consumers without their consent, and cancellations can now be done anytime in-app and take most people 20 seconds or less."

History of FTC Actions Against Uber

This lawsuit is not the first time the FTC has taken action against Uber. In 2017, Uber agreed to pay the FTC $20 million for misleading prospective drivers. Later that year, the company also agreed to undergo regular audits after lying about its privacy protections. However, the FTC has not always taken strong action against Uber, as evidenced by the company’s avoidance of FTC fines over a 2016 data breach.

Recent Developments and Priorities

In December, Uber and its CEO Dara Khosrowshahi joined several tech companies and executives in making donations to the then-incoming president Trump’s inaugural fund. Despite this, FTC Chairman Ferguson recently emphasized that Big Tech is one of the FTC’s priorities. The action against Uber marks the first time the FTC has taken action against a company during Trump’s second term, signaling a potentially more aggressive approach to regulating tech giants.