Uber and other Subscriptions Deceptive Negative Option Practices

The Federal Trade Commission (FTC) has filed a lawsuit against Uber, accusing the rideshare giant of predatory and deceptive practices related to its Uber One subscription program. The FTC alleges that Uber made it easy for users to sign up but intentionally difficult to cancel, potentially violating consumer protection laws.

Uber One Problematic Cancellation Process

Uber One is a subscription program offered by Uber for a monthly payment of $9.99 that offers consumers perks, discounts and other benefits when using the app. Uber has allegedly encouraged consumers to subscribe to the Uber One service, making the sign-up process easy for consumers – cancelling, however, has apparently become difficult to navigate.

Many consumers have reported to have faced challenges when trying to cancel their subscription to Uber one. These challenges include:

• Buried cancellation flows (e.g., requiring multiple clicks or a survey)
• Visual deception: The cancellation button appeared faint or blended into page backgrounds in some versions of the app.
• Auto-renewal timing: Charges were processed up to 48 hours before the billing cycle ended, leaving users unable to cancel in time.

The arduous cancellation process may make consumers feel trapped in unwanted subscriptions, potentially violating transparency standards placed by commissions and agencies like the FTC.

FTC’s Negative Option Rule

When companies make it harder for consumers to cancel their subscription than it requires for them to sign up for one, it risks consumers falling victim to predatory business practices. Much like the case against Uber One, the FTC aims to reduce the amount of companies that engage in subscription traps.

The FTC’s Negative Option Rule gives companies until May 11, 2025 to comply with new regulations that prohibit misrepresentation of a seller’s plan based on a “negative option” program – a method of taking a consumer’s silence as approval for an entity to do something.

This includes requiring companies to

•  provide a simple, immediate way to cancel (e.g., one-click online if signed up online) and remove hidden buttons, forced surveys, or “save” offers before being able to cancel
• Clearly disclose subscription terms before purchase, such as how to cancel, whether a minimum purchase is required and billing frequency
• Ban “Silence as Consent” Traps

Along with the Restore Online Shoppers’ Confidence Act (ROSCA), which seeks to prohibit sellers from charging financial accounts post-initial-transaction unless clearly communicated, the FTC is taking steps to increase regulatory standards for companies engaging in recurring payment, subscription based programs. ROSCA and the Negative Option Rule aim to make transparency about subscription terms more clear and properly displayed for consumers to understand.

Subscription Issues?

If you’ve struggled to cancel Uber One or another subscription, you may have rights under the FTC’s new rules. Contact us if you believe a company is violating these regulations.