Uber Technologies (UBER) stock plummeted 5.01% on Monday after the Federal Trade Commission (FTC) filed a lawsuit against the ride-hailing and delivery company, accusing it of deceptive practices related to its Uber One subscription service.
According to court documents, the FTC alleges that Uber charged consumers for its Uber One subscription service without their consent, failed to deliver promised savings, and made it difficult for users to cancel the service despite "cancel anytime" promises. The lawsuit claims that Uber enrolled consumers in the subscription service and charged them without their consent, raising serious concerns about the company's billing practices.
The news of the FTC lawsuit sent Uber's stock tumbling, with shares trading down 5.01% to $72.26 as of 13:27 ET. This legal challenge comes at a time when Uber has been working to improve its profitability and expand its services. The company is set to report its Q1 2025 financial results on May 7, and this latest development could potentially impact investor sentiment.
The FTC's action against Uber highlights the increasing regulatory scrutiny faced by tech companies, particularly those in the gig economy. If the allegations are proven true, Uber may face significant financial penalties and reputational damage, which could further affect its stock price and business operations in the coming weeks.
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