On April 21, 2025,
Oh!
The Federal Trade Commission filed a lawsuit today against Uber, alleging the rideshare and delivery company 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 its “cancel anytime” promises.
Among the many allegations, the following may not guarantee a courtroom victory, but it stands out as the most egregious issue:
When customers try to cancel, Uber makes it extremely difficult. Users can be forced to navigate as many as 23 screens and take as many as 32 actions to cancel. If a customer tries to proceed with cancellation, Uber can require them to say why they want to cancel, urge them to pause their membership or, if that failed, present them with offers to stay. Some users are told they have to contact customer support to cancel but are given no way to contact them; others claim that Uber charged them for another billing cycle after they requested cancellation and were waiting to hear back from customer support.
This is sludge designed deliberately.
Sludge
‘Sludge’ is a behavioral economics term, the opposite of nudge (if you’ve ever read Richard Thaler’s popular behavioral economics book of the same name).
While nudges try to push people to make better decisions by making certain choices easier than others, sludges make a process more difficult with the goal of creating friction, which makes the consumer less likely to continue the process. (https://thedecisionlab.com/reference-guide/psychology/sludge)
Not all sludge is harmful. When prices fail to allocate scarce resources effectively, sludge can act as a substitute—people pay with their time instead. For example, fans queuing for inexpensive concert tickets.
But deliberately introduce sludge to maximize a company’s revenue comes at the cost of service quality and general social welfare, should not be acceptable. I’m on FTC’s side this time.
More about sludge: (Freakonomics) Sludge, Part 1: The World Is Drowning in It. [This one has Richard Thaler, inventor of sludge and nudge and Nobel Price Winner as guest] https://freakonomics.com/podcast/sludge-part-1-the-world-is-drowning-in-it/
reference & related links
FTC Takes Action Against Uber for Deceptive Billing and Cancellation Practices https://www.ftc.gov/news-events/news/press-releases/2025/04/ftc-takes-action-against-uber-deceptive-billing-cancellation-practices
FTC v. Uber Case Proceedings FTC https://www.ftc.gov/legal-library/browse/cases-proceedings/2423092-uber-ftc-v