Travelers walk past a sign pointing toward the Uber rideshare vehicle pickup area at Los Angeles International Airport (LAX) on February 8, 2023 in Los Angeles, California.
Mario Tama | Getty Images
The Federal Trade Commission on Monday sued Uber, accusing the ride-hailing and delivery company of deceptive billing and cancellation practices tied to its subscription service.
The agency claims Uber violated the FTC Act and the Restore Online Shoppers’ Confidence Act by providing misleading information about its Uber One subscription service, failing to provide a simple way for users to cancel their membership, and charging them without their consent.
“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” FTC Chair Andrew Ferguson said in a statement. “The Trump-Vance FTC is fighting back on behalf of the American people.”
The complaint marks the first FTC action against a major tech company since President Donald Trump began his second term in January. The FTC has several ongoing lawsuits against tech’s megacap companies, including Meta, Google and Amazon. Some cases were brought during President Joe Biden’s presidency, but Trump’s FTC was aggressive during his first term, most notably going after Meta.
Uber and CEO Dara Khosrowshahi each reportedly donated $1 million to President Trump’s inaugural fund, joining a lengthy roster of tech companies and executives attempting to cozy up to the incoming administration.
Noah Edwardsen, an Uber spokesperson, said in an email that the company is “disappointed” by the FTC’s complaint, but that it’s confident the courts will rule in its favor.
“Uber One’s sign-up and cancellation processes are clear, simple, and follow the letter and spirit of the law,” Edwardsen said. “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 One, launched in 2021, costs $9.99 a month or $96 a year and offers perks like fee-free delivery and discounts on some ride bookings, delivery and pickup orders. The company had about 30 million Uber One subscribers as of December, according to its latest annual report.
In its complaint, the FTC argues that Uber advertises its subscription as offering “savings of $25 a month” without calculating the monthly cost of its membership. It also accuses Uber of charging consumers before their billing date.
When users try to cancel their Uber One subscription, Uber makes it “extremely difficult,” while some users are told to contact customer service representatives to proceed with their cancellation, but are given no way to contact them, the FTC alleged. Some users claim that Uber charged them for another billing cycle after they canceled their Uber One membership, the agency said in its complaint.
Ferguson told CNBC last month that the agency will continue to closely scrutinize major tech companies.
“I’ve said since day one Big Tech is one of the main priorities of the Trump-Vance FTC,” Ferguson said. “It’s one of the reasons the president appointed me to this position.”
Khosrowshahi said in January in an interview at the Wall Street Journal’s Journal House in Davos that the company wants “to engage with every government we are a part of,” adding that a “diversity of voices” in government can be a positive, the Journal reported.
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