Uber Faces Legal Action by FTC over Accusations of Deceitful Uber One Pricing and Cancellation Practices
Uber in Hot Water:
The FTC blasts ride-hailing mammoth, Uber, demanding a change in its Uber One subscription practices this week. The accusations? Deceptive billing and troublesome cancellation processes, veiled behind misleading marketing slogans.
The FTC alleges Uber charged customers for Uber One, a money-saving platform boasting free ride deliveries and ride discounts, without explicit consent and safeguarding users from conveniently cancelling.
FTC Chairman Andrew Ferguson, in a bold statement, stated, "Enough of the deceptive auto-subscriptions that bog down consumers. They deserve straightforward terms and simple cancellation processes."
Clapping back, Uber takes a stance against the allegations. Its legal team, brimming with experience from former FTC chair Tim Muris and commissioner Christine Wilson, attributed this lawsuit to a rushed investigative process and a foundation based on misunderstandings. They asserted that Uber's sign-up and cancellation procedures are apparent, straightforward, and in accordance with the law.
Amidst the disarray, Uber is accused of falling short in delivering the promised cost savings to Uber One subscribers. Despite the guarantee of $25 per month savings, the company allegedly neglects the cost of the subscription (up to $9.99/month) when calculating these savings, according to the FTC.
Consumers claim they were unintentionally enrolled and hit with charges prior to the billing date. Take, for instance, customers who registered for a trial period only to be hit with charges before the trial even ended. Another allegation involved the cancellation conundrum: users were forced to navigate through up to 23 screens and undertake 32 steps to cancel their subscriptions.
Frustrated customers, according to the FTC statement, faced roadblocks if they wanted to cancel, given no available methods to contact customer support, or once contacted, found themselves charged again before they received a response.
The lawsuit was lodged in the US District Court for the Northern District of California, citing Uber's infringement upon the FTC Act and the Restore Online Shoppers' Confidence Act.
This lawsuit marks the opening move from Ferguson's FTC against the Big Tech titans under the Trump administration. Uber and its CEO, Dara Khosrowshahi, each contributed $1 million to Trump's inaugural fund, symbolizing their ties to the administration.
The FTC also has an ongoing antitrust suit against Meta's acquisition of Instagram and WhatsApp, filed prior to Trump taking office.
- Wilson, a former commissioner at the FTC, is part of Uber's legal team, while the FTC itself is led by Chairman Andrew Ferguson.
- The FTC claims that Uber's promotional offer with Uber One, promising cost savings, fails to account for the subscription fee in calculations.
- Anytime a consumer wishes to cancel their Uber One subscription, they are allegedly forced to navigate through multiple screens and perform numerous steps, causing frustration.
- Despite contributing to Trump's inaugural fund, Uber and its CEO are currently facing a lawsuit from the FTC, led by Chairman Ferguson, for alleged deceptive practices related to Uber One subscriptions.