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FTC Sues Uber Over Alleged Deceptive Subscription and Billing Tactics
The U.S. Federal Trade Commission (FTC) has initiated legal action against ride-hailing giant Uber, accusing the company of employing misleading billing and cancellation procedures. The lawsuit alleges that Uber improperly charged users for its Uber One subscription service without explicit consent and deliberately complicated the cancellation process for consumers. This action underscores the FTC’s commitment to consumer protection and fair business practices in the digital marketplace.
Allegations of Unauthorized Enrollment and Cancellation Obstacles
The consumer protection agency contends that Uber engaged in deceptive practices concerning its Uber One subscription. According to the FTC complaint, the company enrolled customers in the subscription service and billed them without obtaining proper authorization. Furthermore, the agency asserts that Uber deliberately created a convoluted and lengthy cancellation process, making it excessively difficult for subscribers to terminate their memberships. This alleged behavior raises concerns about transparency and fair dealing within subscription-based services offered by tech companies.
FTC Chairman’s Stance
“The FTC is taking decisive action to protect American consumers,” stated FTC Chairman Andrew Ferguson. He emphasized the agency’s dedication to safeguarding individuals from unfair and deceptive business practices, highlighting the importance of consumer rights in the digital age.
Uber Responds to FTC Charges
An Uber spokesperson refuted the accusations, expressing disappointment with the FTC’s decision to proceed with litigation. The company maintains that its billing and subscription practices are transparent and customer-centric, and they intend to vigorously defend against the FTC’s claims.
Uber One Subscription Service Details
Launched in 2021, the Uber One program offers subscribers benefits such as waived delivery fees and reduced fares on select rides and orders. The subscription is available at a price of $9.99 per month or $96 annually.
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FTC’s Detailed Complaint on Cancellation Process
In its formal complaint, the FTC detailed the intricate steps consumers allegedly had to navigate to cancel their Uber One subscriptions. The agency claimed users could be forced to navigate through as many as 23 separate screens and perform up to 32 distinct actions to complete the cancellation process. This complex procedure, according to the FTC, represents an intentional effort to deter consumers from unsubscribing.
Uber’s Rebuttal on Cancellation Ease
Uber directly disputed the FTC’s portrayal of the cancellation process. Company spokesman Ryan Thornton asserted that current cancellation procedures are straightforward and can be completed within the app in a matter of seconds. “
[C]ancellations can now be done anytime in-app and take most people 20 seconds or less,” Thornton stated, contrasting this with earlier procedures.
Changes to Uber’s Cancellation Policy
Uber acknowledged that previously, cancellation required contacting customer support within 48 hours of the upcoming billing cycle. However, the company stated that this policy is no longer in effect, and subscribers now have the ability to cancel their Uber One memberships at any time directly through the app.
Allegations of Unauthorized Enrollment
The FTC also claims that numerous consumers reported being enrolled in Uber One and charged subscription fees without their explicit permission. The complaint cited instances of consumers being billed even without possessing an Uber account, underscoring the severity of the alleged unauthorized enrollments.
Uber’s Stance on Consent
In response to these allegations, Uber reiterated that it “does not sign up or charge consumers without their consent.” The company insists on obtaining explicit user agreement before enrolling customers in any subscription services.
Broader Context of FTC Legal Actions Against Tech Companies
This lawsuit against Uber marks a significant legal challenge from the FTC against a major U.S. technology firm. The agency’s active pursuit of this case signals a continued focus on regulating the practices of large tech companies and ensuring they adhere to fair and transparent business conduct.
Ongoing FTC Case Against Meta
The FTC’s legal actions extend beyond Uber, as evidenced by the ongoing trial against Meta, formerly known as Facebook. This case, initiated during a previous administration, centers on allegations that Meta established a social media monopoly through its acquisitions of Instagram and WhatsApp. Meta maintains that the FTC’s lawsuit is unfounded, particularly given that the agency previously reviewed and approved these acquisitions.