Three-Clicks You’re Out? The FTC’s Action against Uber Showcases That Businesses Need To Provide Transparent Cancellation Processes

On April 21, 2025, the FTC filed an enforcement action against Uber alleging that Uber enrolled consumers in Uber One without proper consent, created substantial barriers to cancellation, and misrepresented the financial benefits of the subscription. The claims include violations of the FTC Act—which prohibits unfair and deceptive acts in commerce—and the Restore Online Shoppers’ Confidence Act (“ROSCA”)—which prohibits charging consumers for goods and services sold on the internet through a negative option (i.e., failing to cancel a subscription, unless the seller clearly discloses all material terms of the transaction before obtaining the consumer’s information and obtains the consumer’s expressed informed consent for the charges and provides simple mechanisms for the consumer to stop the recurring charges).

Uber One is an Uber subscription service that offers consumers both discounts on rides and free deliveries, for $9.99 per month, or $96 per year subscription. According to the FTC, legions of Uber One customers experienced problems ranging from being charged ongoing monthly fees even after cancelling their subscriptions, being charged without ever signing up for the service, and attempting to cancel their subscriptions online but being stuck in a continuous “doom loop” where they are never actually able to effectuate their cancellations. Specifically, the FTC alleges that when consumers tried to cancel their Uber One memberships: (1) they were forced to navigate through as many as twenty-three screens to cancel; (2) and Uber would require them to provide a reason for cancelling their subscription and failure to do so would result in the consumer being unable to cancel. Next, the FTC alleges that consumers who tried to cancel their subscriptions within forty-eight hours of signing up were forced to contact customer service to cancel, yet Uber did not provide consumers with any actual means to contact customer service. And the FTC further alleges that Uber continued to charge consumers for multiple billing cycles after they had cancelled their subscription.

Uber has denied the allegations and has updated its website to make its cancellation mechanisms simpler for the consumer. That said, this landmark enforcement action against one of America’s largest online platforms has important takeaways for businesses that charge monthly subscription fees to consumers:

Takeaways:

• The Uber suit confirms that businesses offering monthly subscription services must offer consumers an easy means to cancel the service/subscription. That process must be clear and accessible—summarized by the catchphrase “Click to Cancel” or “One-Click” cancellation—and there must be a telephonic means to cancel in addition to an online cancellation flow. In late 2024, the FTC under the Biden Administration enacted the “Click-to-Cancel” Rule—a rule amending ROSCA that would clarify that companies must provide a simple mechanism to cancel subscriptions (we discussed this rule - FTC’s New “Click to Cancel” and What It Means for Businesses with Any Form of Subscription, Membership, or Auto-Renew or Recurring Payment Program). Businesses have until May 14, 2025 to comply with this rule. And earlier in 2024, the FTC fined Grubhub $25 million for violating ROSCA by, among other issues, burying the cancellation option behind numerous web pages such that cancelling the $9.99 monthly subscription was too difficult and confusing for the consumer.
• The FTC’s action against Uber demonstrates that easy cancellation flows will continue to be a priority for the FTC under the Trump Administration. Indeed, the FTC has not made any indications it will rollback, pause, or cease the “Click to Cancel” Rule that the Biden Administration promulgated.
• Marketing must be transparent, especially when claiming that the consumer will see cost savings. Businesses must disclose the terms of the subscription and auto-renewal offer in a simple, digestible format for the consumer before the consumer is prompted to the agree to subscribe to the service. The disclosure must include the cost and the ways to cancel.
• The consumer’s consent must be explicit and not buried in fine print across multiple webpages.