Attorney General James Sues Uber for Trapping Customers in Costly Subscriptions

NEW YORK – New York Attorney General Letitia James and a bipartisan coalition of 20 other attorneys general today joined a lawsuit previously filed by the Federal Trade Commission (FTC) against Uber Technologies, LLC and Uber USA, LLC (Uber) for misleading customers by trapping them in recurring subscriptions to its Uber One service that were exceedingly difficult to cancel. The lawsuit alleges that Uber deceptively marketed and pushed users to enroll in subscriptions to its Uber One service, which promises savings on ride bookings and food deliveries. Once enrolled, often without knowing they had signed up, users were charged $9.99 per month and forced to navigate a labyrinth of confusing menus to cancel their subscriptions. Attorney General James and the coalition argue that Uber’s actions violate state and federal consumer protection laws and are seeking restitution for consumers and a permanent injunction on Uber’s deceptive practices, among other relief.

“Unwanted subscriptions that are seemingly impossible to cancel are driving up costs for everyday New Yorkers,” said Attorney General James. “Companies should not be able to profit by tricking consumers into recurring charges that can require hours of difficult work to stop. Today I am taking action to put an end to Uber’s misleading tactics and get New Yorkers their money back.” 

Uber offers the Uber One subscription service for $9.99 monthly or a $96 annual fee. In advertisements and notifications within the app, Uber promises consumers that an Uber One membership will save them money on food delivery and ride bookings, and that Uber One members can “cancel anytime” without additional fees. Once enrolled, users are charged automatically on a recurring basis for their Uber One memberships.

Attorney General James and the coalition argue that Uber has violated the law by misleading consumers into signing up for Uber One and trapping them in recurring subscriptions. Pop-ups and notifications in the Uber and Uber Eats apps push users to sign up for Uber One, and misstate the benefits and cost savings of the service to consumers. Uber falsely claims that consumers will “save $25 every month” with an Uber One subscription. In addition, Uber’s claim of $25 monthly savings does not account for the monthly fees that users have to pay to maintain their Uber One subscriptions.

Attorney General James and the coalition also allege that Uber violated the law by using various tactics to prevent or make it extremely difficult for consumers to cancel their Uber One membership. Consumers must navigate a maze of misleadingly labeled screens and menus within the app to arrive at the page to cancel their subscriptions. Even if a consumer manages to find the right page, if they are within the final 48 hours of the end of their billing cycle, the “end membership button” is not visible to them. Consumers who do manage to find the “end membership” button do not end their membership by pressing it. Instead, they are taken through a series of offers to pause or receive discounts on their Uber One membership. In total, consumers must navigate through at least seven different screens that require at least 12 different actions in order to actually cancel their memberships.

Uber makes it even more difficult for consumers to cancel near the end of their subscriptions. The lawsuit alleges that Uber billed consumers before their monthly membership cycle ended, leading many consumers to be charged before their free trial period ended and before they were able to try to cancel their subscriptions. Consumers who tried to cancel in the app within 48 hours of their renewal date were sent into seemingly endless loops in the app, only to be told that payments were already in progress and that cancelling via the app is impossible. Consumers were required to contact “support” to cancel, but Uber gave them no guidance about how to do that. Even consumers who reached Uber support encountered unreasonably long wait times. Often, when they heard back from support, they had already been charged for the next billing cycle, even when they initiated their cancellation request well before the end of their free trial or current billing cycle.

Attorney General James and the coalition argue that Uber’s misleading tactics to push users into recurring subscriptions and prevent them from easily cancelling these subscriptions violate state and federal consumer protection laws, including the Restore Online Shoppers’ Confidence Act (ROSCA). The lawsuit seeks a permanent injunction stopping Uber’s illegal conduct, monetary damages, and other penalties.

Joining Attorney General James in this lawsuit are the attorneys general of Alabama, Arizona, Connecticut, Illinois, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, North Carolina, Ohio, Oklahoma, Pennsylvania, Virginia, West Virginia, Wisconsin, and the District of Columbia, as well as the District Attorney for Alameda County, California.