The United States Federal Trade Commission (FTC) is investigating whether Uber's flagship subscription plan Uber One violates consumer protection laws.
According to Zhidong Finance APP, the United States Federal Trade Commission (FTC) is investigating whether Uber's (UBER.US) flagship subscription plan Uber One violates consumer protection laws. The Uber One subscription plan offers discounts on ride-hailing and delivery orders. According to Uber in October, approximately 25 million people have subscribed to Uber One.
According to a document, the FTC is investigating issues related to Uber's product registration and cancellation, with the investigation starting earlier this year. Uber has confirmed that it has been asked by the FTC about this subscription plan and stated that they are cooperating with the institution's investigation.
Uber spokesperson Noah Edwardsen said in a statement, "We will continue to address any questions the FTC may have about our cancellation policy. The cancellation process for Uber One follows the letter and spirit of the law - Uber One members can easily cancel their membership within the app. In fact, most cancellations take only 20 seconds or less."
FTC declined to comment on this.
FTC enforces consumer protection laws against companies that mislead consumers in subscription terms. The agency recently sued several companies, including Amazon (AMZN.US) and Adobe (ADBE.US), accusing them of making subscription cancellations overly difficult. However, FTC's consumer protection investigations do not always lead to enforcement actions. The agency often seeks fines in settlements due to limited ability to win fines in court, and a 2021 Supreme Court ruling further weakened its enforcement ability.
It is reported that a few days after the November 5th U.S. election day, FTC sent a draft complaint to Uber, seeking to resolve the investigation through a settlement and requesting Uber to respond within a week. According to a letter from Uber's external legal counsel to five FTC commissioners, they complained that the negotiations were too hasty. The settlement proposal put forward by the commission, less than two months into the FTC's investigation, required substantial funds for actions suspected of violating the law.
Lawyers for uber technologies say the company's bargaining was rejected by FTC staff. The lawyers criticized the institutions' staff for 'trying to complete any case at a record time' before Trump's inauguration in January next year.
Republican Federal Trade Commission member Melissa Holyoak said the allegations are 'very concerning,' and the FTC may be 'eager to make a determination before the upcoming government change.' She requested consumer protection department staff to provide updates on all cases they are currently working to resolve in the next two months. It is reported that Trump has not yet appointed a new head for the FTC.