The Federal Trade Commission on Monday sued Uber Technologies Inc., alleging the ride-hailing giant engaged in deceptive billing practices and made it unreasonably difficult for users to cancel subscriptions to its Uber One membership service. The lawsuit, filed in federal court in San Francisco, marks the first major enforcement action by the FTC under President Donald Trump's second term.
FTC Chair Andrew Ferguson said in a statement, "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."
The FTC accused Uber of violating the FTC Act and the Restore Online Shoppers' Confidence Act by misleading consumers about Uber One's benefits, charging users without proper consent, and creating significant hurdles to canceling subscriptions. The agency said Uber advertised savings of up to $25 per month without disclosing the membership's monthly fee of $9.99 or annual cost of $96.
Uber One, launched in 2021, offers perks such as free delivery and discounts on select ride and delivery orders. The company reported having approximately 30 million subscribers as of December, according to its most recent annual filing.
Uber spokesperson Noah Edwardsen said the company is "disappointed" with the FTC's decision to file suit. "We 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," 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."
In its complaint, the FTC said Uber at times billed consumers prior to their renewal dates and, in some cases, charged them for additional billing cycles even after they believed they had successfully canceled their memberships. The agency also claimed some users were told to contact customer service to cancel but were not provided with any method to reach those representatives.
This is not the first time Uber has faced federal scrutiny. In 2017, it settled allegations of misleading consumers about its data privacy practices. A year later, it paid $20 million to resolve claims that it exaggerated driver earnings. In 2022, Uber avoided criminal charges over a 2016 data breach after admitting its employees failed to notify the FTC that the incident compromised the personal data of 57 million passengers and drivers.
Ferguson reiterated the agency's aggressive stance on tech oversight, telling CNBC, "I've said since day one Big Tech is one of the main priorities of the Trump-Vance FTC. It's one of the reasons the president appointed me to this position."
