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Uber has denied allegations that it engaged in deceptive practices and ran subscription traps filed in a lawsuit by the US Federal Trade Commission (FTC).

The regulator alleged the rideshare and delivery company charged consumers for its Uber One subscription service without their consent, failed to deliver promised savings and made it difficult for users to cancel the service despite its “cancel anytime” promises in the suit filed on April 21.

FTC chairman Andrew N Ferguson said Americans were tired of getting signed up for unwanted subscriptions that seemed impossible to cancel.

Ferguson said: “The Trump-Vance FTC is fighting back on behalf of the American people.”

He added: “We’re alleging that Uber not only deceived consumers about their subscriptions, but also made it unreasonably difficult for customers to cancel.” 

The watchdog said Uber’s deceptive billing and cancellation practices violate the FTC Act and Restore Online Shoppers’ Confidence Act and applied to the US District Court for the Northern District of California for a permanent injunction to "prevent future violations" of those laws, as well as financial and other reliefs.

Claims Disputed

However, Uber has disputed each of the claims and said it did not sign up or charge customers without their consent.

In response to the claim that it had falsely led consumers to believe they could cancel their subscriptions at any time without additional fees, Uber said the majority of cancellations occur in-app and take 20 seconds or less.

It said that although previously in order to cancel consumers had to contact Support within 48 hours of their next billing period, this was no longer the case, consumers could now cancel in the app at any time, and it had refunded customers who had contacted Uber Support to cancel within 48 hours of their next billing period. 

Uber spokesperson Ryan Thornton said: “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” Thornton continued. “Uber does not sign up or charge consumers without their consent, and cancellations can now be done anytime in-app and take most people 20 seconds or less.”

In 2024, the FTC finalised a new "Click-to-Cancel" rule aiming to prevent consumers being caught in subscription traps.

The rule requires sellers to make it as easy for consumers to exit a subscription as it is to enter one. 

Following a consultation on the proposed rulemaking in March 2023, the FTC said it had received more than 16,000 comments from consumers and state agencies, consumer groups and trade associations.

Separately, the UK’s government also launched a  on secondary legislation to implement subscription contract rules in 2024 amid concerns consumers were being locked into contracts that they may no longer want.