Uber under fire: FTC probes subscription service complaints

The US Federal Trade Commission (FTC) is investigating Uber's flagship subscription service, Uber One, amid complaints from customers that they were signed up to the program without their consent and that it is also tough to cancel. The probe started earlier in 2024.

Uber One discounts rides and food deliveries for a yearly membership fee. The company claims 25 million subscribers. Uber said the FTC has reached out to them about the program and that they are cooperating with the review.

A spokesperson for Uber, Noah Edwardsen, said in a statement that cancellations of Uber One can be easily done within the app and most cancellations take less than 20 seconds. The FTC has not commented on the investigation.

The FTC enforces consumer protection laws and has recently sued companies like Amazon and Adobe for allegedly making it difficult to cancel subscriptions.

The agency often seeks settlements with monetary penalties because winning fines in court can be challenging. The FTC recently passed a rule requiring businesses to simplify subscription cancellation processes, but this rule is currently being contested in court.

As reported by Bloomberg, enforcement agencies sometimes try to finalise the investigations before a new administration begins.

In this case, the FTC reportedly sent Uber a proposed settlement just days after the November election. Uber's lawyers said the FTC's settlement offer demanded excessive money and that the agency was rushing the negotiations before the new president's inauguration.

Uber's attorneys also claimed that the staff of the FTC rejected the counteroffer and accused them of trying to close the case before the change in administration.

Holyoak, a Republican commissioner at the FTC, complained about the charges and asked the FTC staff to provide her with information on all cases that have reached the final stages.

Holyoak is reported to be one of three candidates being considered for the FTC Chair position along with another Republican commissioner and multiple outside candidates. The new president has not yet nominated another head for FTC.

(With inputs from Bloomberg)