The Federal Trade Commission is suing Uber, accusing the rideshare company of signing some users up for its paid membership program, Uber One, without their permission or knowledge and of deceptive billing and cancellation practices linked to the service. The FTC says Uber violated the FTC Act and the Restore Online Shoppers Confidence Act by deceiving users about its Uber One subscription option, making it difficult for customers to cancel the service and charging customers without consent.
FTC officials said Uber, which charges roughly $10 a month for Uber One, lied by saying customers using the service would save around $25 a month and claimed the service is easy to cancel.
The lawsuit, however, argues Uber’s claims do not account for the monthly cost of its membership. It states that some users were charged before their billing date. Additionally, the lawsuit states that Uber makes it “extremely difficult” to cancel.
The agency said Uber directs some riders to call customer service to cancel but provides no method to contact representatives.
What are FTC officials saying?
FTC Chairman Andrew Ferguson said in a statement Monday, April 21, that the lawsuit was another example of how the Trump administration is fighting for Americans.
“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” Ferguson said. “The Trump-Vance FTC is fighting back on behalf of the American people.”
How is Uber responding?
Uber spokesperson Noah Edwardson said that while they are disappointed in the lawsuit, the company believes the courts will agree with them.
“We are disappointed that the FTC chose to move forward with this action but are confident the courts will agree with what we already know,” said Edwardsen. “Uber One’s sign-up and cancellation policy processes are clear, simple, and follow the letter and spirit of the law.”
What other legal challenges has Uber faced?
Uber has faced legal battles from the FTC in the past, including during Trump’s first term. However, this is the first time it faced a challenge from the second Trump administration. The lawsuit is also the first FTC action against a major tech company under President Donald Trump since his second term began. Uber donated $1 million to Trump’s inauguration fund, along with Big Tech companies like Google, Meta and Amazon.
The company settled with the FTC in 2017 over accusations it made false privacy and data security safeguard claims. In 2018, the rideshare giant settled with the FTC for $20 million. At the time, Uber faced allegations it inflated prospective earnings among drivers to recruit more workers. The company also avoided criminal charges in 2022 after settling a lawsuit accusing it of failing to notify customers about a 2016 data breach, exposing the data of 57 million users and drivers.
What is the Restore Online Shoppers Confidence Act?
U.S. Congress passed ROSCA, a federal law, during the Obama administration. It outlaws deceptive online billing practices and unauthorized charges against consumers. The law also mandates more transparency for companies through billing information and easy cancellation and prevents third parties from charging a person’s account unless they have informed them of all documents and received the customer’s informed consent.
Authorities have accused several companies, including Adobe, Amazon and others allegedly involved in online billing scams, of violating this law.
