FTC sues Uber, alleging it engaged in deceptive billing for Uber One

Uber One's pricing is under scrutiny by the US Federal Trade Commission. Photo / Getty Images

The Federal Trade Commission sued Uber on Monday, alleging that the ride-hailing and food-delivery company enrolled unwitting customers in its Uber One subscription service and then made it difficult for them to cancel.

The company has advertised Uber One as a way to qualify for discounts on rides and services, saying on its website or app that consumers could save US$41.67 ($69.50) a month using the subscription service and cancel at any time, according to the FTC complaint. The service costs US$16.65 ($28) per month or US$160.04 ($267) a year, and automatically renews, according to the complaint, which was filed in the US District Court for the Northern District of California.

But, the legal filing says, the US$41.66-a-month saving excluded the cost of the subscription, and consumers had to navigate a “maze” of screens to cancel. Some subscribers said they were billed before their free trial ended, the complaint said.

The practices violate the FTC Act and the Restore Online Shoppers’ Confidence Act, which require e-retailers to disclose the terms of service, get consumers’ consent before charging and provide an easy way to cancel recurring subscriptions, the FTC alleged in a news release.

Uber disputed the agency’s claims and said its sign-up process included disclosures that customers would be charged on a recurring basis.

“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,” Uber spokesman Ryan Thornton said in a statement.

Uber said it has changed one practice outlined in the lawsuit. Customers who sought to cancel their subscription within 48 hours of a billing date had to “take as many as 32 actions and navigate as many as 23 screens” before contacting customer service to do so, the complaint said. In some instances, it then took so long to get a response from customer service that some consumers were charged anyway, the lawsuit alleged.

Now Uber One members can “cancel in the app at any time,” the company said Monday, “and we have refunded customers who had reached out to Uber Support to cancel within 48 hours of their next billing period.”

Uber’s stock was down 4% Monday afternoon.

“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” said FTC chairman Andrew Ferguson.

– Washington Post