FTC Takes Action Against Uber for Deceptive Billing and Cancellation Practices

FTC Takes Action Against Uber for Deceptive Billing and Cancellation Practices

The Federal Trade Commission filed a lawsuit on Monday against Uber, alleging the rideshare and delivery company charged consumers for its Uber One subscription service without their consent, failed to deliver promised savings, and made it difficult for users to cancel the service despite its “cancel anytime” promises.

Uber CEO Dara Khosrowshahi, a Brown graduate, was on campus giving a presentation on April 11.

“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” said FTC Chairman Andrew N. Ferguson. “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.”

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In its complaint, the FTC alleges that Uber used deceptive billing and cancellation practices. For example, the complaint alleges:

When signing up for Uber One, customers are wrongly promised savings of $25 a month. Even if that were true, Uber does not account for the cost of the subscription (up to $9.99/month) when calculating those savings. The company also obscures material information about the subscription (for example, by using small, greyed out text which consumers can easily miss). Many consumers say they were enrolled without consent; the complaint quotes one consumer saying they were charged despite not even having an Uber account.

After sign-up, Uber charges consumers before their billing date. For example, some consumers who signed up for a free trial say they were automatically charged for the service before the free trial ended even though Uber promises customers the ability to cancel at no charge during the trial period.

When customers try to cancel, Uber makes it extremely difficult. Users can be forced to navigate as many as 23 screens and take as many as 32 actions to cancel. If a customer tries to proceed with cancellation, Uber can require them to say why they want to cancel, urge them to pause their membership or, if that failed, present them with offers to stay. Some users are told they have to contact customer support to cancel but are given no way to contact them; others claim that Uber charged them for another billing cycle after they requested cancellation and were waiting to hear back from customer support.

The FTC alleges that the company’s deceptive billing and cancellation practices violate the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA), which requires online retailers to clearly disclose the terms of the service they are selling, obtain consumers’ consent before charging them for a service, and provide a simple way to cancel a recurring subscription.

The Commission vote authorizing the staff to file the complaint was 2-0-1 with Commissioner Mark R. Meador recused. The complaint was filed in the U.S. District Court for the Northern District of California.