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Uber Technologies was sued by the US Federal Trade Commission, which claims the rideshare and delivery company hurt consumers through “deceptive billing and cancellation practices” as part of its flagship subscription service.
In a complaint filed Monday, the FTC alleges the company charged consumers for its Uber One product without their consent, misled users about the program’s savings and made it “unreasonably” burdensome to cancel the service. The agency found users can be required to navigate as many as 23 screens and take up to 32 actions to cancel, according to an FTC statement.
Uber shares dropped, extending declines after the announcement to as much as 5.3 percent in New York. They were down 4.5 percent at 2:15 p.m. to $71.84 (roughly Rs. 6,120).
The company denied the FTC’s claims, saying the company doesn’t sign up or charge consumers without their consent, and that cancellations now take most people 20 seconds or less. “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,” a spokesman said.
The FTC’s three commissioners voted 2-0 to bring the case, with Mark Meador, the newest commissioner, recused. The lawsuit confirms a Bloomberg News report last year that the regulator had opened an investigation into the company over the enrollment and cancellation aspects of Uber One. In the final days of the Biden administration, the FTC also began probing whether Uber and rival Lyft Inc. illegally coordinated to limit drive pay in New York City.
The FTC enforces consumer protection laws against companies that mislead consumers about subscription terms. The agency has recently sued several companies, including Amazon.com Inc. and Adobe Inc., for allegedly making it too difficult to cancel subscriptions.
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