The Federal Trade Commission and 21 states filed an amended complaint against Uber Technologies, escalating their legal challenge over allegations that the ride-sharing company engaged in deceptive billing and cancellation practices related to its Uber One subscription service.
The amended complaint, filed in the U.S. District Court for the Northern District of California, expands on an initial lawsuit the FTC brought against Uber in April. The coalition now includes the District of Columbia and 21 states: Alabama, Arizona, California, Connecticut, Illinois, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Virginia, West Virginia, and Wisconsin.
The complaint alleges that Uber charged consumers for its subscription service without their consent, failed to deliver promised savings including $0 delivery fees, and made it exceedingly difficult for users to cancel the subscription. The amended filing seeks civil penalties for alleged violations of the Restore Online Shoppers' Confidence Act and various state consumer protection laws.
Uber markets its Uber One subscription as a monthly or annual service that qualifies consumers for discounts and promotions, including $0 delivery fees and $25 in monthly savings. However, according to the complaint, many consumers report they did not receive the promised monthly savings or had to pay delivery fees despite Uber's $0 delivery fee promise.
The allegations detail several deceptive practices that have affected consumers nationwide. Many customers say Uber enrolled them in the Uber One subscription without their knowledge or consent, while others report being charged for the service despite never knowingly signing up. The complaint describes cases where consumers who signed up for free trial offers were automatically enrolled and charged for the subscription before the trial period ended.
Particularly troubling are the allegations regarding Uber's cancellation process. According to the complaint, users attempting to cancel their subscriptions face significant barriers, despite Uber's claims that consumers can "cancel anytime." The FTC alleges that users trying to cancel can be forced to navigate as many as 23 screens and take as many as 32 actions to complete the cancellation process.
This complex cancellation procedure appears designed to discourage consumers from ending their subscriptions, a practice that violates consumer protection principles requiring companies to make cancellation as easy as enrollment. The difficulty in canceling subscriptions has become a common complaint across various industries, prompting increased regulatory scrutiny.
The Restore Online Shoppers' Confidence Act, cited in the complaint, specifically addresses deceptive practices in online transactions and subscription services. The law requires companies to clearly disclose material terms before charging consumers and prohibits charging for products or services without express informed consent.
The Commission authorized the amended complaint with a 2-0 vote, indicating strong support for pursuing the case. The FTC noted that it files complaints when it has "reason to believe" that defendants are violating or about to violate the law and that proceeding appears to be in the public interest.
This case reflects broader regulatory concerns about subscription service practices across the digital economy. Companies offering subscription services have faced increased scrutiny over automatic renewals, unclear cancellation processes, and charges without proper consumer consent. The FTC has made subscription service enforcement a priority, recognizing the financial impact these practices can have on consumers.
For Uber, the amended complaint represents a significant expansion of legal challenges. The company, which has faced various regulatory and legal issues since its inception, must now defend against allegations from federal regulators and attorneys general from more than 20 jurisdictions.
The case will be decided by the federal court, which will determine whether Uber's practices violated consumer protection laws and what penalties, if any, should be imposed. If the allegations are proven, Uber could face substantial civil penalties and be required to change its subscription practices.
Consumers who believe they were affected by Uber's subscription practices may find relief through the legal proceedings. The case also serves as a warning to other companies offering subscription services about the importance of transparent billing practices and easy cancellation procedures.
The lead attorneys handling the matter for the FTC are Paul Mezan, Stephanie Liebner, and James Doty from the agency's Bureau of Consumer Protection. The case will likely take months or years to resolve, depending on whether Uber contests the allegations or seeks to settle.
This enforcement action demonstrates the FTC's commitment to protecting consumers from deceptive subscription practices and ensuring companies comply with federal consumer protection laws. The participation of 21 states and the District of Columbia underscores the widespread nature of the alleged violations and the coordinated effort to address them.