Uber money-making practice deemed shady in new lawsuit

When it was founded in 2009, Uber was promoted as a cheaper and more convenient way to catch a ride than traditional taxis.Uber quickly expanded into cities across the U.S. before local governments had a chance to regulate the service, which allowed people to call a car to their exact pickup location, and see upfront pricing. Uber also promised shorter wait times and app-based ease. That was then. Today, an Uber ride is generally the same price as a taxi, and pickups are not always predictable. Over time, Uber has been embroiled in myriad conflicts with local, state, and federal governments, drawing scrutiny as far back as 2010. Against that backdrop, the Federal Trade Commission (FTC) filed a lawsuit in April related to the company's Uber One subscription service. The suit alleges violations of federal and state consumer protection laws governing subscription billing and deceptive practices.Now 21 states, along with Washington, D.C., have joined the suit, according to the FTC. Uber is in hot water over its subscription billing practices.Shutterstock What regulators say Uber did wrongThe complaint alleges that Uber enrolled some users in Uber One without proper consent, charged users before free trials ended, and made it difficult for subscribers to cancel. The lawsuit, filed in federal court in California, represents one of the most serious regulatory challenges Uber has faced in recent years.Uber One, which offers perks such as reduced delivery fees and discounts on rides and food orders, has become a key part of Uber’s strategy to build customer loyalty and increase recurring revenue.According to the lawsuit, regulators allege several key issues with Uber’s handling of Uber One subscriptions:Unauthorized or premature charges. Some claim they were billed before trial periods expired or without clearly agreeing to enroll.Misleading savings claims. Regulators argue Uber overstated how much customers would save by subscribing.Confusing cancellation process. The complaint claims canceling Uber One required navigating multiple screens or contacting customer support, rather than offering a simple, one-step option. Source: FTC Complaint Federal and state officials argue these practices violate consumer protection laws designed to ensure transparency and choice in subscription billing.“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” FTC Chair Andrew Ferguson said in announcing the original FTC action — a line analysts reference when framing regulatory sentiment around subscription-based services.New York Attorney General Leticia James appeared to agree with Ferguson. "Unwanted subscriptions that are seemingly impossible to cancel are driving up costs for everyday New Yorkers," James said in a press release. "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.” States participating in the FTC's complaint against UberIn addition to New York, the FTC lists the following states as having joined the complaint, according to court filings:AlabamaArizonaCaliforniaConnecticutIllinoisMarylandMichiganMinnesotaMissouriMontanaNebraskaNew HampshireNew JerseyNorth CarolinaOhioOklahoma PennsylvaniaVirginiaWest VirginiaWisconsinUber pushes back against the allegationsUber has denied wrongdoing and said it believes its subscription practices comply with the law.The company has argued that Uber One provides clear disclosures during sign-up and that customers can cancel at any time through the app. Uber has also stated that it has made changes to simplify the cancellation process and improve billing transparency.The company framed the lawsuit as a disagreement over interpretation rather than evidence of intentional deception.Related: Uber Eats could soon cost much more in this US stateIn April, Uber CEO Dara Khosrowshahi responded to a new lawsuit against his company brought by the Federal Trade Commission, calling the action a “head-scratcher," according to reporting in Semafor.“We make it incredibly easy to sign up for Uber One, the value is enormous, the renewal rates are over 90%. It’s a great product,” Khosrowshahi said. “We allow you to cancel. We allow you to pause. That one was a head-scratcher for me.”Uber earnings During its most recent earnings call and quarterly shareholder letter on November 5, 2025, Uber reported roughly:20% year-over-year revenue growth to about $13.5 billionTrips up around 22%Gross bookings up about 21%Adjusted EBITDA up roughly 33%$2.2 billion in free cash flowInvestors are also watching longer-term growth drivers such as robotaxi deployments and autonomous tech expansion, which Uber continues to emphasize.Why this case matters to everyday Uber usersFor millions of Uber customers, the case highlights how easy it can be to overlook recurring app charges.Subscription services tied to transportation and delivery are often marketed as convenience tools, but they can quietly become long-term expenses. Consumer advocates warn that users should regularly review app settings and bank statements to ensure they are only paying for services they actively use.If regulators succeed, the lawsuit could lead to refunds, civil penalties, or changes to how Uber markets and manages subscriptions — outcomes that could affect users nationwide.FTC's broader crackdown on subscription billingUber’s legal fight comes as regulators ramp up enforcement against companies across industries that rely on auto-renewing subscriptions, including the FTC's Click to Cancel rule.From streaming platforms to fitness apps, federal and state agencies have signaled they are prepared to challenge practices that make it hard to cancel or obscure the true cost of services. The Uber case could set an important precedent for how subscription-based tech companies operate going forward.The case is expected to move slowly through the courts, with a trial potentially years away. In the meantime, Uber One remains active, and consumers are urged to review their subscriptions carefully.Uber's influence on the ridesharing economyAbout 189 million people use the Uber app every month, according to Statista.In the U.S., Uber captures roughly three-quarters of total ride-hailing spending, Bloomberg Second Measure reports, dwarfing legacy taxi services and outpacing competitors like Lyft. Subscription scale: Its membership program, Uber One, has attracted around 30 million subscribers, says PYMNTS.com, underscoring how the company has moved beyond one-off trips to recurring revenue models. Uber has reported gross bookings in the tens of billions, with mobility and delivery services generating substantial revenue and daily trips in the billions. Related: Uber is changing how travelers order rides at airports