The Federal Trade Commission is suing the rideshare company Uber for what it’s calling deceptive business practices involving its Uber One subscription service. In a complaint filed in a San Francisco district court, the FTC cites instances where customers say they were charged for the service when they believed their subscriptions were canceled, or were not allowed to cancel their accounts easily.
Uber One costs $10 a month and allows users to get discounts, free delivery on Uber Eats and cash back, in addition to other perks.
However, the FTC says that customers who sign up for free trials have had difficulty canceling and have ended up with unexpected charges.
“Today, we’re alleging that Uber not only deceived consumers about their subscriptions, but also made it unreasonably difficult for customers to cancel,” FTC Chairman Andrew N. Ferguson said in a press release.
The complaint cites instances where it would take 23 screens and 32 actions to cancel an Uber One subscription.
An Uber spokesperson said that the company doesn’t sign up or charge consumers without their consent and that “cancellations can now be done anytime in-app and take most people 20 seconds or less.”
“We are disappointed that the FTC chose to move forward with this action,” the spokesperson told CNET, “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.”
In an email, Uber contested points in the FTC’s complaint, saying that it discloses information about what customers will be charged. “Consumers who canceled were never charged additional fees,” it said.
Subscription services in the crosshairs
Subscription services have been a target for the FTC recently, as it has implemented rules requiring companies to make them simpler and easier to cancel. Last year, California passed a law requiring it to be as easy as a single click for consumers. The changes were, in large part, enacted to combat increasingly sophisticated ways that companies were keeping customers on the hook for paid services.
Expect to see more FTC action against companies that fail to follow the rules on subscriptions, says Syracuse University law professor Shubha Ghosh, who focuses on business, antitrust and intellectual property law.
“Very likely there will be more suits as the FTC, across administrations, seeks to address anticompetitive practices that harm consumers, especially practices that raise prices and limit consumer choices,” Ghosh told CNET. “Ticketmaster is one example. We may see actions against crypto and payday loans online.”
But don’t expect rewards from these FTC lawsuits if you feel you were taken advantage of by a subscription-based service. For customers, it’s not the same as a class action suit in which plaintiffs may get money from court-designated damages, Ghosh said.
“The FTC cannot recover restitution for consumers after the Supreme Court’s unanimous decision in [a 2021 case involving] AMG Management,” he said. “The FTC can change business practices, however, through injunctive relief under the Federal Trade Commission Act. The FTC can also obtain refunds for violations of the Fair Credit Reporting Act and the (Better Online Ticket Sales) Act.”
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