Uber defends subscription service charges against FTC

OAKLAND, Calif. (CN) — A federal judge questioned Thursday how Uber discloses its cancellation policy to consumers for its subscription service Uber One, saying the technology giant needed to inform customers not just with clear language but also be easily accessible and readable.

U.S. District Judge Jon Tigar told Uber attorney Benjamin Mundel he may be “chumming the waters" for the Federal Trade Commission when he mentioned a phrase about canceling services within a statute in the Restore Online Shoppers’ Confidence Act, or ROSCA, that Uber intentionally didn’t include in its motion to dismiss.

Mundel said that Uber clearly and conspicuously disclosed all the information necessary under the statute to inform consumers about Uber’s subscription service — including that the advertised $0 delivery fee included language for “eligible” orders and that its claim of customer’s saving an average of $25 a month was reasonable for people to believe as an average, and not a guarantee every customer would see that amount of savings.

“The reasonable consumer understands there are benefits and there are costs,” said Mundel.

The FTC brought the suit against Uber in April 2025, after an investigation by the agency and various customer complaints, according to FTC attorney Paul Mezan. The FTC seeks a permanent injunction for violations of the Federal Trade Commission Act and ROSCA, as well as civil penalties.

The customer complaints stem from an inability to cancel the $9.99 monthly subscription service after signing up for a free trial, said Mezan, who works in the Bureau of Consumer Protection at the FTC.

The customer must go through a “Rube Goldberg-like cancellation maze,” he said, noting it took 32 actions, or clicks and answers, by customers to obtain a cancellation.

Many customers, he said, experience long-wait times and significant delays, and are charged again before they can fully cancel Uber One. Mezan noted that Uber knew it was making cancellation difficult to impossible because it later created an online tutorial — that has since been viewed by thousands of customers, he claimed — to understand how to cancel the subscription.

Furthermore, FTC attorney James Doty said, Uber was in violation of ROSCA not only for its “labyrinthian” cancellation methods but because during sign-up, Uber did not prompt the customer to manually enter their billing information before sign-up, a necessary step to be in accordance with ROSCA.

Instead, Uber uses the customer’s billing information on file and asks the customer if it would like to switch to a different payment method. Doty argued that Uber could ask customer’s to affirmatively confirm their information without Uber automatically supplying it and wouldn’t be in violation of ROSCA, but Uber doesn’t want to because fewer people would sign up.

Mundel argued that the statute Doty referred to doesn’t apply to Uber because it is a first-party biller and not a third-party, which has different specifications. Mundel said, if the statute did apply, Uber complies by offering the switch payment option.

In December, 21 states joined the FTC in the suit against Google. Michael Dean, an attorney with the Alabama Attorney General’s Office representing the state plaintiffs, said at the hearing the states had standing because “Uber’s conduct affect the economic wellbeing” of the states’ residents.

Tigar, a Barack Obama appointee, told Dean the states have “firm ground” for standing but did not indicate his thoughts Thursday on the motion to dismiss and took the matter under submission.