The lawsuit highlights allegations of consumer consent issues and challenges with cancelling subscriptions easily.
US FTC Takes Legal Action Against Uber Over Subscription Service Practices
US FTC Takes Legal Action Against Uber Over Subscription Service Practices
The Federal Trade Commission accuses Uber of misleading billing practices, complicating subscription cancellations.
In a significant move, the US Federal Trade Commission (FTC) has initiated legal proceedings against the ride-hailing and food delivery giant Uber, citing deceptive billing practices related to its Uber One subscription service. The FTC's complaint alleges that the company has been charging consumers for its subscription without proper consent, while also creating cumbersome obstacles for users attempting to cancel their subscriptions.
FTC Chairman Andrew Ferguson, appointed during the Trump administration, emphasized the agency's commitment to protecting consumer rights in a statement addressing the lawsuit. An Uber spokesperson refuted these claims, expressing the company's disappointment with the FTC's decision to pursue the lawsuit.
The Uber One subscription, launched in 2021, offers users various perks, such as no-fee delivery and discounts on rides, priced at $9.99 per month or $96 annually. According to the FTC, the cancellation process has been overly complex, requiring customers to navigate through up to 23 screens and perform as many as 32 actions before successfully terminating their subscription.
In response, Uber maintained that the cancellation process has been simplified. Company spokesperson Ryan Thornton stated that cancellations can now be completed directly in-app and typically take under 20 seconds. He clarified that previously, customers had to contact support within 48 hours of their next billing cycle to cancel, but that policy has since changed.
The FTC's complaint also pointed to numerous reports of customers allegedly being enrolled in Uber One without their explicit consent, including claims from an individual who was charged despite not possessing an Uber account. Uber has strongly contested this assertion, reiterating that it does not sign up or bill users without their consent.
This lawsuit represents an important moment for the FTC as it marks the first significant legal action against a major tech company since the beginning of President Trump's second term. The FTC is concurrently engaged in ongoing litigation against Meta, regarding its acquisitions of Instagram in 2012 and WhatsApp in 2014, which the agency contends bolstered a monopoly in the social media landscape. Meta has labeled the FTC's lawsuit as misguided, citing that the agency had initially reviewed and approved those acquisitions.
As the legal battles unfold, consumers, tech companies, and regulatory bodies will be closely watching the implications for subscription services and consumer rights in the digital marketplace.
