FTC and States File Amended Complaint Against Uber for Deceptive Billing and Cancellation Practices

The Federal Trade Commission, joined by 21 states and the District of Columbia, filed an amended complaint alleging Uber deceptively enrolled consumers in its Uber One subscription, charged them without consent, failed to deliver promised benefits such as $0 delivery fees and $25 in monthly savings, and made cancellation unusually difficult (reportedly requiring up to 23 screens and 32 actions); consumers also report automatic charges at the end of free trials or being billed despite never knowingly signing up. The plaintiffs are seeking civil penalties for alleged violations of the Restore Online Shoppers’ Confidence Act and state laws; the complaint was filed in the U.S. District Court for the Northern District of California after a 2-0 FTC vote and the case will be decided by the court.

Analysis

The Federal Trade Commission, joined by 21 states and the District of Columbia, filed an amended complaint against Uber alleging deceptive practices around its Uber One subscription, including enrollment without consent, failure to deliver advertised benefits such as $0 delivery fees and $25 in monthly savings, automatic post-trial charges, and onerous cancellation processes reportedly requiring up to 23 screens and 32 actions. The plaintiffs seek civil penalties for alleged violations of the Restore Online Shoppers’ Confidence Act and multiple state laws; the complaint was filed in the U.S. District Court for the Northern District of California following a 2-0 Commission vote and the case will be decided by the court. Procedurally, the expansion of plaintiffs to 21 states and DC broadens potential remedies and increases the reputational and compliance risk for Uber’s subscription business and customer relationships. Market signals classify this development as moderately negative with bearish tone, implying near-term pressure on subscription revenue, potential for fines or mandated operational changes, and a need to monitor litigation outcomes and any public disclosures on refunds, cancellations or product adjustments.

Key Decisions for Investors

• It may be prudent to avoid initiating new long positions in UBER until the court rules or material remediation and financial impact are disclosed, given the expanded state participation and potential civil penalties
• Consider short-duration hedges or protective options to limit downside from a near-term negative market reaction tied to litigation headlines or regulatory actions
• Monitor court filings, any announced refunds or changes to Uber One’s billing/cancellation flows, and company disclosures on estimated liabilities; reassess positions if Uber announces concrete remediation or limited financial exposure
• If exposure is small relative to portfolio size and no adverse operational disclosures follow, re-evaluate for tactical buying opportunities after clear evidence of remediation or a favorable legal development