The U.S. Federal Trade Commission on Monday filed a lawsuit in a California U.S. District Court against Uber for its "deceptive billing and cancellation practices" related to its Uber One subscription service, the agency announced.
Uber One is a membership program that costs $9.99 per month or $96 annually and offers free delivery and up to 10 percent off eligible orders on restaurants and stores marked with the Uber One icon. Members also can earn 6 percent Uber One credits on eligible rides, according to Uber.
The company in March 2022 included Uber One on the platform of its Uber for Business corporate division.
The suit alleges that the rideshare and delivery company charged consumers for Uber One "without their consent, failed to deliver promised savings, and made it difficult for users to cancel the service despite its 'cancel anytime' promises."
It further alleges that these practices violate the FTC Act and the Restore Online Shoppers' Confidence Act. The latter requires online retailers to clearly disclose the terms of the service they are selling, obtain consumers' consent before charging them for a service, and provide a simple way to cancel a recurring subscription, according to the FTC.
FTC in the suit alleges that customers who sign up for Uber One are "wrongly promised" savings of $25 a month because Uber does not take into account the cost of the subscription when calculating those savings. FTC also alleged Uber charges consumers before their billing date, sometimes before a free trial has ended, "even though Uber promised customers the ability to cancel at no charge during the trial period."
The suit also alleges that Uber makes it "extremely" difficult for customers to cancel the Uber One service. "Cancellation is even more difficult for consumers within 48 hours of their billing date," according to the filing. "During this period, Defendants remove the option to cancel their subscription service from their applications, forcing consumers to take as many as 32 actions and navigate as many as 23 screens."
Some users reported to the FTC that Uber told them to contact customer support, but then were given no way to do so. Others said Uber charged them for another billing cycle even after they requested a cancellation while waiting to hear back from customer support.
"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 said in a statement. "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."
Previously, consumers within 48 hours of their next billing period had to contact support in order to cancel, according to Uber. "This is no longer the case." Uber said that a majority of cancellations occur in-app, and consumers can now cancel in the app at any time. "And we have refunded customers who had reached out to Uber Support to cancel within 48 hours of their next billing period," according to Uber.