Uber could face billions of dollars in fines after 21 states and the District of Columbia joined a federal agency’s lawsuit against the ride share company.
The Federal Trade Commission first filed a lawsuit against Uber in April alleging “deceptive billing and cancellation practices” in its Uber One program - a supposed money-saving subscription service. The complaint also included a long list of consumer frustrations alleging subscription enrollments, a complex cancellation process, and misleading savings claims.
On Monday, the suit was amended as 21 states - Alabama, Arizona, California, Connecticut, Illinois, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Virginia, West Virginia, and Wisconsin - along with D.C - are seeking financial penalties.
The addition of penalties could cost the company billions, said David B. Schwartz, a former Federal Trade Commission lead attorney and current antitrust partner at Bryan Cave Leighton Paisner LLP.
“Uber’s maximum potential monetary liability is enormous, likely in the billions or tens of billions of dollars,” Schwartz told The Independent by email. “While the FTC has redacted many of the numbers to make a definitive determination—and Uber is likely able to show that a significant portion of consumers were not misled in signing up for Uber One—the numbers likely quickly add up to substantial 10- or 11-digit potential recoveries, to say nothing of the nearly two dozen states and territories that have their own recoveries.”
Some customers said that the company enrolled them in Uber One without their knowledge, according to the complaint. Specifically, customers who enrolled in Uber One free trials were “automatically enrolled and charged for the subscription before the trial ended,” documents state.
Such alleged actions violate the Restore Online Shoppers’ Confidence Act, the commission claimed, which prohibits companies from “charging any financial account in an Internet transaction unless it has disclosed clearly all material terms of the transaction and obtained the consumer's express informed consent to the charge.”
Uber may have violated state laws, too, the commission said.
Not only did some Uber customers claim they were enrolled in Uber One without consent, but they said that cancelling those subscriptions was far more difficult than Uber’s “cancel anytime” claim. In some cases, users allegedly had to go through more than 30 actions to cancel their subscription.
“Users who try to cancel can be forced to navigate as many as 23 screens and take as many as 32 actions to cancel,” the commission said.
As part of its pitch to consumers, Uber One claimed that users could get $0 delivery fees and monthly savings of up to $25. However, some customers complained that Uber One simply did not live up to the discounts it touted.
“Some consumers say they did not receive the promised monthly savings or had to pay fees on deliveries despite the $0 delivery fee promise,” the commission said.
The Federal Trade Commission noted it only files complaints against companies when it has “reason to believe” companies are “violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest.”
In response to the amended complaint, Uber said in a statement: “Uber One’s sign-up and cancellation processes are clear, simple, and follow the letter and spirit of the law. Uber does not sign up or charge consumers without their consent, and cancellations can be done anytime in-app and take most people 20 seconds or less.
“The FTC, and the states that have decided to join this misguided lawsuit, are wrong, and we will vigorously defend these claims in court.”
Trump’s tariffs are having an uneven effect on holiday prices
Consumers feel so much worse about their finances than last year, new report reveals
Weight-loss drug customers caught up in telehealth scam. Here’s how to avoid it
Government agency skewered by banking group for stern take on credit card rewards
The amount of money needed to retire comfortably, according to US workers
New jobs report shows over 100k jobs lost in October primarily due to federal layoffs
