Uber is in hot water (once again) - this time with the US Federal Trade Commission (FTC).
👉 Background: Uber is the VC-funded, NASDAQ-listed ride-sharing app founded in 2009. Since then, it has grown to over 75 million active users around the world.
👉 What happened: Now, Uber is in hot water (once again) - this time with the US Federal Trade Commission (FTC). The FTC is trying to understand the enrolment and cancellation processes of Uber One users.
👉 What else: The FTC believes that Uber makes it very easy to sign up to Uber One... but not so easy to cancel — the old ‘negative option’ marketing.
💡Negative option marketing is a strategy where a customer's inaction is considered consent to be charged for goods or services.
💡Here’s the issue: some companies create intentionally-difficult cancellation flows that traps people into paying for something just because they didn’t know how to cancel. In fact, the FTC recently sued Amazon and Adobe too for allegedly making it too difficult to cancel subscriptions as well.
💡And, given the revenue from Uber One’s membership fees are “in excess of $1 billion” run-rate - this could be costly for Uber.
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