The Federal Trade Commission (FTC) has filed a lawsuit against Uber, alleging that the ride-hailing giant engaged in deceptive practices with its Uber One subscription service, charging customers without their consent and making it unreasonably difficult for them to cancel. The lawsuit, filed on Monday, claims that Uber failed to deliver the promised savings and obscured material information about the subscription, violating federal laws.

According to the FTC's complaint, Uber customers were wrongly promised savings of $25 a month, but the company failed to account for the cost of the subscription, which can be up to $9.99 per month. The agency also alleges that Uber automatically charged consumers who signed up for a free trial before their billing date, and made it "extremely difficult" for customers to cancel, requiring them to navigate up to 23 screens and take up to 32 actions.

The FTC's lawsuit comes after the agency finalized its "click to cancel" rule in October 2024, which requires companies to make canceling a subscription as easy as signing up for one. The rule is expected to go into effect on May 14. FTC Chairman Andrew Ferguson stated, "Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel. The Trump-Vance FTC is fighting back on behalf of the American people."

Uber has denied any wrongdoing, accusing the FTC of rushing the investigation process and basing its claims on "unvetted allegations." The company's spokesperson stated that Uber One's sign-up and cancellation processes are clear, simple, and follow the letter and spirit of the law, and that cancellations can now be done anytime in-app and take most people 20 seconds or less. However, the FTC's complaint alleges that some users were told they had to contact customer support to cancel, but were given no way to contact them, and others claimed that Uber charged them for another billing cycle after they requested cancellation and were waiting to hear back from customer support.

Uber's outside counsel, Christine Wilson, accused the FTC of failing to conduct a full investigation and basing its complaint on "misunderstandings of both the facts and the law." Tim Muris, a former FTC chair who represented Uber during the investigation period, also criticized the agency's approach, saying that the "unconventional nature of the rushed investigative process" was compounded by the addition of new and unvetted allegations at the last minute.

The lawsuit seeks to prohibit Uber from continuing its alleged deceptive practices and to force the company to pay monetary relief. The outcome of the case could have significant implications for the subscription-based business model, which has become increasingly popular in the tech industry. Uber One's member base has reached 30 million across 34 countries, and the company says it is growing roughly 60% year-over-year.

The case highlights the ongoing efforts of the FTC to protect consumers from unfair business practices, particularly in the digital economy. As the agency continues to push companies to make their subscription services more transparent and consumer-friendly, the tech industry will be watching closely to see how the Uber lawsuit unfolds.