FTC files case against Uber for misleading customers

The Federal Trade Commission (FTC) filed a lawsuit against Uber on Monday, accusing the ride-sharing and delivery company of charging users for its optional subscription service without permission and making it hard to cancel it. The complaint, filed in federal court in California, alleges Uber engaged in deceptive bill and cancellation practices and failed to “deliver promised savings.”

The watchdog has stated that Uber violated FTC Act and Restore Online Shoppers’ Confidence Act through its deceptive claims regarding Uber One subscription service, failure of the company to provide easier ways for consumers to cancel the Uber One subscription, and charging the customers without any consent.

“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel. The Trump-Vance FTC is fighting back on behalf of the American people,” FTC Chair Andrew Ferguson said in a statement.

The Uber One service costs $9.99 per month and it offers discounts on Uber’s ride hailing and food delivery services, i.e. Uber cabs and Uber Food. The FTC in its lawsuit filed in San Francisco has accused Uber of falsely claiming that users would save about $25 a month through the service and deceived the consumers into believing that it was very easy to cancel the service at any point.

However, refuting the allegations leveled by FTC, an Uber spokesperson said that the company does not sign-up or charge customers without their due consent.

“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,” Uber spokesperson Noah Edwardsen said.

Christine Wilson, a former FTC commissioner who is now a partner at Freshfields and outside counsel for Uber, similarly slammed the suit.

“The unconventional nature of the rushed investigative process that preceded this enforcement action was compounded by the addition of new and unvetted allegations at the last minute. It is disappointing to see the FTC stray from the rigor and fairness that has long defined the agency at its best,” she wrote.

The commission’s vote to file the complaint was 2-0-1, with Commissioner Mark Meador recusing himself. Meador was sworn into the position earlier this month, while the commission’s two Democratic commissioners were fired by President Trump last month.