FTC Takes Legal Action Against Uber for ‘Misleading’ Uber One Subscriptions
Having a hard time cancelling your Uber One subscription? The U.S. government says you’re not alone. On Monday, the Federal Trade Commission filed a lawsuit against the delivery and rideshare giant Uber, alleging that the company engaged in “deceptive billing and cancellation practices.” The FTC’s allegations pertain to Uber’s premium subscription service, Uber One. “I looked at a credit card bill and realized that Uber Eats had been charging $9.99 for an Uber One account for the past 8 months. I have never signed up for this service,” reads a typical customer comment cited in the suit. Another complaint states, “I don[’]t have an UBER account and NEVER have but I am being charged a monthly recurring fee of $9.99 for UBER ONE. I don[’]t even know how they got my debit card info.”
This screenshot from the Uber app was included in the FTC filing.
Credit: FTC
Why did the FTC target Uber with the new suit? Uber advertised Uber One as a $9.99 per month premium subscription platform that provided customers with exclusive benefits, such as savings on rides and deliveries. However, according to the FTC, Uber misled consumers regarding what those savings actually entailed. “Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” said FTC Chairman Andrew N. Ferguson in a statement. “Today, we’re alleging that Uber not only deceived consumers about their subscriptions, but also made it unreasonably difficult for customers to cancel.” For example, Uber advertised that customers could save $25 per month as an Uber One member. The FTC contests this claim, noting that the company did not account for the $9.99 monthly membership fee when promoting purported savings. “These claims are false,” the government’s lawsuit asserts. “Many consumers do not actually save $25 a month by using Uber One…Uber’s savings claim assumes that the subscription is free; the purported savings do not subtract any costs.”
The issues with Uber One extended beyond false advertising. According to the lawsuit, while Uber advertised that users could cancel their Uber One subscription “at any time” with “no additional fees,” the FTC stated that Uber often charged consumers before the free trial ended. Moreover, cancelling the subscription wasn’t as straightforward as suggested.
Easy to sign up, incredibly hard to cancel. The suit alleges that Uber employs deceptive practices known as “dark patterns” to first encourage users to sign up and then discourage them from cancelling their Uber One subscriptions.
The FTC notes that users could sign up with just a couple of clicks, yet cancelling required up to 32 actions. In the app, buttons directing users to “Start saving” or “Try for free” automatically enrolled them in the trial, according to the lawsuit. In one scenario, users were presented with two options, “Start saving” or “Cancel.” The government’s complaint states, “Once consumers click ‘Start saving,’ they are immediately enrolled in Uber One and will be charged every month or year for a subscription. The only other choice is to ‘Cancel.’ It is unclear what tapping that button would cancel at this point — it could be the delivery or ride they are trying to book; they have not signed up for Uber One and thus could not cancel it.”
When customers attempted to cancel the subscription, the FTC notes, “Uber makes it extremely difficult.” The FTC claims Uber users were “forced to navigate” through a series of steps to cancel their paid Uber One plan. The cancellation process could involve navigating over 23 different screens and require users to complete up to 32 distinct actions just to cancel. As users approached the end of their current subscription, Uber supposedly made cancellation increasingly challenging. “Uber can require them to say why they want to cancel, urge them to pause their membership or, if that fails, present them with offers to stay,” the FTC points out. Some customers were compelled to contact Uber customer support to cancel but were not provided with clear contact methods. Additionally, many users experienced charges while attempting to cancel, according to government findings.
Uber’s alleged violations and the company’s official response. The FTC is charging Uber with five counts under Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA), which include misrepresentation and unfairly charging without consent. In a statement shared by Uber, the company disputes any wrongdoing. “We are disappointed that the FTC chose to move forward with this action, but are confident that the courts will agree with what we already know: Uber One’s sign-up and cancellation processes are clear, simple, and follow the letter and spirit of the law,” stated an Uber spokesperson. “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.” Uber mentioned that they previously required consumers to contact the company to cancel Uber One if they were within 48 hours of their renewal period. However, they have since updated this policy, allowing users to cancel their subscription directly within the app at any time.
