Uber sued by FTC and states over deceptive billing and cancellation practices

FTC and 21 states accuse the company of violating federal and state consumer protection laws

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What just happened? When the Federal Trade Commission expanded its lawsuit against Uber this week, it did so with the backing of 21 states and the District of Columbia. The case centers on allegations that the company's Uber One subscription service engaged in deceptive billing and obstructive cancellation practices in violation of federal and state laws. The amended complaint includes a request for civil penalties and intensifies the agency's original action from April.

The complaint alleges that Uber repeatedly charged customers without their informed consent and failed to honor the savings and benefits it promoted to subscribers.

Among the central claims are that certain customers were billed for Uber One before their free trial expired, while others were charged even though they had never knowingly enrolled. Regulators also contend that Uber's design of its cancellation process contradicts its cancel-anytime promise. According to the complaint, some users needed to navigate as many as 23 screens to terminate their memberships.

Uber One, which the company markets as a subscription offering with delivery fee savings and other benefits, promises members $25 a month and $0 in delivery fees. However, the complaint alleges that some users did not receive the advertised savings.

The case cites violations of the Restore Online Shoppers' Confidence Act, a federal law requiring online services to clearly disclose recurring charges, obtain affirmative consent before billing customers, and provide an accessible cancellation mechanism.

The participation of more than twenty state governments signals a coordinated approach to policing digital subscription models that rely heavily on recurring payments and friction-heavy cancellation interfaces. The case may also determine how regulators interpret online commerce standards in the context of modern app-based services.

Uber, in its response, defended its practices and rejected the accusations that its subscription terms were misleading. Uber said in a statement that, if successful, the lawsuit could disrupt how most subscription-based services function today and noted that the company plans to contest the allegations in court. Uber maintained that the sign-up and cancellation workflows for Uber One are clear and comply with applicable law.

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The suit's success could bring civil penalties and reshape how technology companies design consumer consent flows for subscription-based services. It also highlights growing legal pressure on firms whose business models depend on automated renewals and friction in user cancellations.

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