By Ramishah Maruf | CNN
New York — The Federal Trade Commission sued ride-hailing giant Uber Monday, alleging “deceptive” billing and cancellation practices in its Uber One subscription service.
The FTC alleged the company charged customers for Uber One, a service for fee-free delivery and discounts on rides, without their consent and made it too difficult for them to cancel, despite the company’s “cancel anytime” marketing.
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“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” FTC Chairman Andrew Ferguson said in a press release.
Uber pushed back against the allegations. Its lawyers that represented the company throughout the FTC investigation, including former FTC chair Tim Muris and former FTC commissioner Christine Wilson, called it a “rushed investigative process” and said the complaint was based on “misunderstandings.”
“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 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,” the company said in a statement.
The FTC alleged Uber also “failed to deliver promised savings” for the Uber One subscription. Though customers were promised savings of $25 a month, “Uber does not account for the cost of the subscription (up to $9.99/month) when calculating those savings,” the agency said in the press release.
Customers were also allegedly enrolled without their consent and were charged before the billing date. The lawsuit used an example of customers who said they signed up for a free trial and were then automatically charged before the free trial even ended.
And when it came to cancelling, the FTC said, users were forced to click through up to 23 screens and take 32 actions to cancel.
“Some users are told they have to contact customer support to cancel but are given no way to contact them; others claim that Uber charged them for another billing cycle after they requested cancellation and were waiting to hear back from customer support,” the press release said.
The suit was filed in the US District Court for the Northern District of California and alleges Uber violated the FTC Act and the Restore Online Shoppers’ Confidence Act.
The suit is one of the first major actions against Big Tech spearheaded by Ferguson’s FTC under the Trump administration. Like many leaders in the industry, Uber and its CEO Dara Khosrowshahi each donated $1 million, respectively, to Trump’s inaugural fund.
An antitrust suit brought by the FTC against Meta’s acquisition of Instagram and WhatsApp is also underway, though that lawsuit was filed before Trump took office.
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