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US FTC and 21 states file amended complaints against Uber regarding subscription practices

Uber is accused of deceptive billing practices and cancellations by the U.S. Federal Trade Commission. The agency, 21 states as well as the District of Columbia have filed an amended complaint.

The lawsuit filed in U.S. District Court, Northern District of California, alleges that Uber charged users for subscriptions they didn't consent to, did not deliver on promised benefits like zero-dollar delivery charges and monthly savings and made it difficult for them to cancel.

Following the news, shares of Uber dropped more than 3%.

Uber was first sued by the FTC in April for similar allegations. The amended complaint aims to seek civil penalties in connection with alleged violations of state consumer protection laws and the Restore Online Shoppers' Confidence Act.

Uber One is marketed as a subscription that can be purchased monthly or annually. It promises benefits such as $0 delivery charges and up to $25 monthly savings. The FTC stated that many consumers paid delivery fees in spite of the promise, and did not receive the advertised savings.

Uber is also accused of enrolling users into subscriptions without their consent, including those who had signed up for a free trial, and charging them before the trial ended.

Uber has denied these allegations, saying that it never charges or signs up customers without their consent.

According to the filing, canceling was described as being "extremely difficult" with users having to navigate through up to 23 screens.

Uber stated in an emailed statement that most cancellations can be made in less than 20 seconds and in the Uber app at any time. "Prior until December 2024, customers had to call Support within 48 hours to cancel their next billing cycle, as was explained when signing up."

California, New York and Texas are among the states that have joined the FTC. Reporting by Kritika Lama in Bangalore, Costas Pittas in Los Angeles, and Ryan Patrick Jones at Toronto; editing by Chris Reese & Shinjini Ganuli

(source: Reuters)