The United States’ Federal Trade Commission (FTC) has called out Uber for unfair trade violations, alleging the company broke the law using deceptive billing and cancellation practices.
The FTC says the rideshare pioneer has failed to provide simple mechanisms for a consumer to stop recurring charges from being placed on their personal accounts through its Uber One service.
It's alleged that Uber Technologies (NYSE: UBER) violated the FTC Act and the Restore Online Shoppers' Confidence Act through Uber One subscriptions.
Customers receive no fee and discounts on service, including food delivery, for $9.99 a month and “wrongly promised savings of $25 a month”, the FTC said in a press release.
There's also a yearly fee of $96 a year and the service began in November 2021.
“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” FTC Chairman Andrew N. Ferguson said.
"The Trump-Vance FTC is fighting back on behalf of the American people.
"Today, we're alleging that Uber not only deceived consumers about their subscriptions, but also made it unreasonably difficult for customers to cancel."
Australia also uses the Uber One premium service with similar cost rates and ambiguity about the fee structures.
According to media outlet PYMNTS, Uber responded saying the app shows material disclosures on the same screen as the option to choose a payment method, does not sign up or charge customers without their consent, enables cancellations in-app in 20 seconds or less, and allows cancellations in the app at any time.
On the back of the FTC filing, shares in the US$153 billion market-capped ride-share company dropped 3% to US$72.92 on Monday.
