FTC mostly succeeds in avoiding dismissal of claims against Uber; states must replead

Federal Trade Comm’n v. Uber Technol., Inc., 2026 WL 976077, No. 25-cv-03477-JST (N.D. Cal. Apr. 10, 2026)

Since November 2021, Uber has offered a subscription plan called Uber One, typically $9.99 a month or $96 annually with automatic charging and renewal. The Uber One subscription promises a “$0 Delivery Fee on eligible food, groceries, and more,” other benefits, and the option to “[c]ancel anytime without fees or penalties.” Other marketing claims include that consumers in the United States “[s]ave $25 every month” on average. “Uber uses consumers’ payment information to charge for Uber One, for which some consumers report they never signed up and have no idea why they were charged.”

The FTC alleged that members seeking to cancel their Uber One subscriptions must “take at least 12 to 32 actions,” including sometimes “calling [Uber’s] customer support to cancel, where they experience long wait times and significant delays.”

After navigating through several different screens in the app, consumers encounter a button called “End membership.” Members who click the button must answer a survey about why they seek to cancel, with follow-up questions that vary according to their stated reason. Throughout the process, the button to continue towards cancellation is black with gray or white font (in contrast to the button for keeping Uber One, which is white), and its position relative to other options changes, potentially misleading consumers who might tap the same position on the screen in an unsuccessful attempt to continue cancellation.

“For a significant part of the relevant time period, [the] End Membership button was not visible to any consumers in the final 48 hours of their billing cycle.” Even when they could see it, the app made it more difficult for them to cancel, offering a screen stating that they can keep their memberships active in exchange for savings of “$25 each month.” “[M]any” consumers who tried to decline were looped back to a cancellation survey even when they pressed the button that should have worked and didn’t succeed in cancelling.

The $25 savings screen, presented to consumers attempting to cancel within 48 hours of a new billing period, notifies consumers that their “next scheduled payment may be in process” and directs them to contact support. The FTC alleged that, “[i]n fact, Uber always charged consumers before the supposed billing date and never processed cancellations concluded via the in-app cancellation flow in the final 48-hour window.”

Moreover, “Uber did not provide any contact information for ‘support’ or give any guidance on where to navigate within the app to find ‘support’ for the vast majority of the relevant time period, and only offered the information after receiving notice of the FTC’s investigation.”

Finding where to contact “support” in the app requires navigating to and scrolling to the bottom of several more screens. Members must navigate to a support page, enter a complaint, and then re-navigate to the same page from an earlier screen to view the chat window through which a customer service representative may respond to the cancellation request. However, “even consumers who have found their way to the cancellation support queue have often been unable to promptly cancel or avoid being charged due to excessively long hold times: consumers often report waiting hours or up to a full day to receive a response from Uber, and that they were already billed for the next payment in the interim.” For consumers who reach customer service and cancel during this 48-hour window, Uber confirms cancellation and states that the consumer will not be charged after cancelling, but in fact, Uber always charges these users for one additional month.

Enact click-to-cancel now!

Also, while some materials note that cancellation is “with no additional fees” or “without fees or penalties,” elsewhere Uber discloses in fine print that members must cancel up to 48 hours before the membership renewal date “[t]o avoid charges.”

The FTC sued, along with 22 states, alleging violations of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a), and numerous state laws; violation of the Restore Online Shoppers’ Confidence Act, including failure to provide disclosures of required terms and failure to obtain express informed consent before charges, and failure to provide simple mechanisms for stopping recurring charges. The court mostly upheld the federal claims but wanted more detail on the state law claims, dismissing them without prejudice.

FTC Act: First, the court didn’t resolve whether Rule 9(b) applied because even if it did, the FTC pled with sufficient particularity.

The FTC alleged that Uber’s representation “that consumers may cancel their subscription services at any time with no additional fees” was false because cancellation within 48 hours of the next billing period causes consumers to incur “additional fees” of $9.99 a month or $96 a year. That is, “Uber forces consumers who wish to cancel their subscription to resubscribe for a billing period that has not yet begun and whose benefits they have not yet begun to enjoy. Plaintiff’s theory that advance payment for a subscription that is no longer desired constitutes an ‘additional fee’ is intuitively colorable and Uber provides no authority to the contrary.”

That Uber occasionally, in fine print, warns consumers to cancel before the final 48 hours of the billing period didn’t prevent misleadingness. First, those disclaimers didn’t appear until, at the earliest, the checkout screen for Uber One; earlier in the enrollment flow Uber promises not to charge “additional fees” at cancellation. And fine-print 48-hour-window disclosure was plausibly insufficient to alter the “net impression” created by Uber’s statements that no additional fees are charged. This was additionally supported by allegations that, for trial period subscriptions, Uber bills consumers before the stated billing date—the end of the trial period; that some consumers who were told their subscriptions had been cancelled continued to receive charges for additional months; and that the 48-hour window is expressed in hours, but the billing “date” isn’t, “obfuscating the cutoff for consumers to cancel without incurring a fee.” 

However, the FTC didn’t entirely allege the falsity of the claim that Uber One members would “save $25 every month” even though many members do not do so. It was not sufficient that “Uber’s savings claim assumes that the subscription is free; the purported savings does not subtract any costs.” The complaint didn’t allege that $25 was not in fact the average savings enjoyed by Uber One members, even though it alleged several categories of members whose savings fall significantly below $25 a month. And one of the savings representations in the cancellation flow used “could,” which “communicates a possible but uncertain outcome,” along with clarifying that “[e]stimated savings do not include membership price.”

The FTC alleged that the $25 savings representation in the enrollment flow was misleading because it didn’t account for the cost of the subscription and didn’t disclose that; the enrollment flow was plausibly more significant than the cancellation flow. “Because it is possible that reasonable consumers would assume that projected savings account for the subscription cost and Uber has not shown otherwise, the Court will not dismiss this claim.”

The FTC also failed to plausibly allege the falsity/misleadingness of the claim that Uber One members receive “$0 delivery fees.” Uber plainly advertised $0 delivery fees on eligible orders. True, it was apparently “somewhat difficult to ascertain” which orders are in fact “eligible,” requiring a geographic radius, a participating store, and an order minimum that might vary based on the storefront, but “eligible” was “a clear qualifier signaling that only orders meeting certain criteria will qualify for $0 delivery fees. Even if a reasonable consumer may not know which orders will qualify, no reasonable consumer would assume that all orders do so.” Unless no orders were deemed “eligible,” that’s not deceptive.

ROSCA: ROSCA applies to “transaction[s] effected on the Internet through a negative option feature.” A “[n]egative option feature” is “a provision under which the customer’s silence or failure to take an affirmative action to reject goods or services or to cancel the agreement is interpreted by the seller as acceptance of the offer.” Uber’s briefing omitted the key phrase “or to cancel the agreement” in quoting the law, damaging its credibility and refuting its argument that ROSCA didn’t apply because users do not sign up for Uber One through silence or failure to take action.

The complaint alleged that a number of consumers were enrolled in Uber One without their knowledge or consent, which would “unquestionably” constitute a negative option feature.

But even for the others, the ROSCA violations were plausible. The negative option feature arose after sign-up, when consumers in free trials were “automatically enrolled in and charged for an Uber One subscription’ before the end of their free trial period.” There was also automatic renewal by default, a “textbook example of a negative option feature.” “Indeed, a free-to-pay conversion like Uber’s is explicitly identified in ROSCA as employing a negative option feature.”

It was plausible that Uber violated ROSCA by “fail[ing] to clearly and conspicuously disclose before obtaining consumers’ billing information all material transaction terms,” including (1) the recurring nature of Uber One; (2) the “true benefits and savings of an Uber subscription,” (3) the timing of charges; and (4) the method of cancellation.

ROSCA requires disclosure of “all material terms of the transaction before obtaining the consumer’s billing information.” But, in all or nearly all cases, consumers sign up for Uber One after providing billing information to use Uber for a single ride or delivery. The FTC’s argument that there was a per se violation of ROSCA in the timing of the disclosures, regardless of their sufficiency, was plausible. Even if companies can give consumers the option to autofill billing information on file, “ROSCA requires that consumers be given that choice after the disclosures.” In the current purchase flow, the terms show on the same screen that says Uber will charge their preexisting payment method. “Consumers consent to the use of that billing information only in the limited sense that they decline to select the ‘switch’ option to input different billing information.” The result here “might be different if Uber were to give consumers the option to autofill their existing payment information or otherwise affirmatively opt-in to its use.”

Failure to disclose material terms: Although each enrollment method had some kind of notice that Uber One members will incur recurring monthly charges, the FTC alleged that these notices are “in much smaller, lighter, and less prominent font than any other claims on” the same screens. ROSCA requires clear and conspicuous disclosures based both on “visual aspects” of the purported disclosure and the “context” of the transaction. The claim was plausible given the font, and the court was also sympathetic to the FTC’s argument that the “context” of the transaction weighs against the clarity and conspicuousness of the disclosures “because many plaintiffs are enrolled via unsolicited push notifications, pop-ups, and advertisements that appear when they are trying to secure a ride or place a delivery. Courts have observed that consumers do not expect to be enrolled in a subscription when making a one-time purchase, and therefore have little reason to look for fine print notifying them of the subscription.”

Some marketing materials also apparently “obfuscate[d] Uber One’s nature as a recurring subscription service.” E.g., “Love Uber One? Get 50% off 1 year / Save on your Uber One membership” “could mislead a consumer into believing they are already subscribed to Uber One and are merely being offered the chance to continue using Uber at a lower rate.” So too when the app directed a consumer attempting to book a ride to a popup asking them to sign up for Uber One or to “cancel”: “a consumer might believe they must sign up for Uber One or risk cancelling the ride request.”

It was also plausible that Uber failed to clearly and conspicuously disclose the timing of subscription fee charges. Its disclosures were (1) in fine print and (2) plausibly inaccurate, because, as Uber admitted, it charges consumers 48 hours prior to the stated billing date. Thus, “Uber’s disclosure of such dates is not only unhelpful but actively deceptive.” The court also found the timing disclosures “potentially difficult to read given the small size of a smartphone screen.”

And it was plausible that Uber failed to disclose the separate and more onerous method of cancellation consumers seeking to cancel their subscriptions within 48 hours of their renewal date had to use. Uber argued that it always said that users should cancel “in the app.” But, the court noted, “in the app” “provides little guidance given how thoroughly the cancellation button is buried within the app.” Also, “users within the 48-hour window actually cannot cancel within the app, but must instead contact customer service (although that process can be initiated through the app).” “Thus, Uber’s only purported attempt to disclose the cancellation method does not in fact tell users how to cancel.”

The FTC further alleged that Uber didn’t disclose the true benefits and savings: “save $25” could be misleading “insofar as a reasonable consumer believes it to include the subscription price.”

ROSCA also requires that a seller obtain a consumer’s “express informed consent” before charging the consumer. A consumer provides express informed consent if “(1) the website provides reasonably conspicuous notice of the terms to which the consumer will be bound; and (2) the consumer takes some action, such as clicking a button or checking a box, that unambiguously manifests his or her assent to those terms.”

The complaint alleged that some consumers who were charged never signed up at all, and that “others took action to revoke their consent and were charged again anyway, either because of the unreasonably long wait times in the support chat queue or despite the fact that they appeared to have successfully cancelled their subscription.” The FTC wasn’t required to affirmatively plead the precise number of consumers affected by each issue. And Uber’s alleged failure to sufficiently disclose material information would also defeat informed consent. In addition, the FTC alleged that consumers consented to free trial terms under which they will not be charged until the trial ended, only to be charged before that time.

The FTC wasn’t seeking civil penalties under the FTC Act, only under ROSCA, and that’s ok. “[B]efore commencing” any civil action seeking civil penalties, the FTC must provide written notification to and undertake consultation with the Attorney General. Although the complaint didn’t allege that this consultation had occurred, it wasn’t required to plead that; a presumption of regularity applied. (FWIW, though the DOJ has lost the benefit of that presumption, my guess is that the FTC lawyers knew what they were doing.) “If Uber believes that the FTC has failed to comply with [this requirement], it can seek that information during discovery.”

Uber also argued that the plaintiffs failed to plead the requisite knowledge under ROSCA or state statutes, but they did. Under ROSCA, “a business can be liable only if it either knew that the act was unlawful or if it should have known the act was unlawful.”

The allegations were sufficient, including the existence of “more than a dozen actions against other companies under the FTC Act and ROSCA, including for failing to have simple cancellation mechanisms and charging consumers without authorization,” “a public outpouring of complaints about unauthorized charges and difficulty cancelling Uber’s subscription services,”; internal testing conducted by Uber reflecting significant customer confusion regarding the cancellation process; “employee discussions of the problems with Uber’s disclosures,”; and even Uber’s “receipt of a letter from the FTC in September 2024 probing about Uber’s subscription programs, including enrollment and cancellation mechanisms and compliance with ROSCA.” Uber didn’t provide an interpretation of the statute and then explain why its conduct complied with that interpretation or otherwise defeat the plausibility of its knowledge.

The state plaintiffs had Article III standing for some claims, but needed more specific description of the elements of the state law claims.

“When a state sues to vindicate its own direct sovereign or proprietary interests, it need only meet Article III’s standing requirements.” When they assert parens patriae standing, they must also “[1] ‘allege injury to a sufficiently substantial segment of its population,’ [2] ‘articulate an interest apart from the interests of particular private parties,’ and ‘express[es] a quasi-sovereign interest.’ ”

Uber’s alleged violations of the FTC Act, ROSCA, and state statutes didn’t itself interfere with states’ sovereign “power to create and enforce a legal code.” But states also have a sovereign interest “in protecting their marketplaces” from deceptive practices, because “[f]raudulent market conduct has the capacity to degrade faith in the state, chill economic activity, and deter participation in the market.” The complaint sufficiently alleged the latter harm, describing “a public outpouring of complaints” and “significant customer confusion” and explaining that “[c]onsumer confidence is essential to the growth of online commerce” and that “the Internet must provide consumers with clear, accurate information.”

For parens patriae standing, one “helpful indication” was whether the injury to citizens “is one that the State, if it could, would likely attempt to address through its sovereign lawmaking powers.” Given that the plaintiff states “have in fact addressed the alleged injury by enacting the consumer protection statutes under which they sue,” they had an interest in the economic well-being of state citizenry, apart from private parties. But it was disputed whether they alleged injury to sufficiently substantial segments of their populations. Allegations that Uber has enrolled more than 28.7 million consumers into Uber One subscriptions weren’t enough without knowing how many lived in the plaintiff states. Thus, they failed to allege parens patriae standing.

Still, they had authority to sue, and to sue in federal court. But the relevant counts didn’t plead the elements of any state law claim. “A cursory listing of [several] states’ statutes is insufficient to satisfy Twombly and Iqbal’s pleading requirements.”