Peloton was accused of an “egregious money grab” over its controversial decision to tack on a $95 “equipment activation fee” for those who purchased a used bike.
The one-time fee, which was revealed in a shareholders letter and blog post when the company announced its earnings last week, comes on top of the $44 monthly subscription for Peloton’s online classes.
Those who purchase new bikes, which cost significantly more than the used models, don’t have to pay the activation fee.
The added fee left many die-hard fans fuming.
“It’s a pretty egregious money grab that should have plenty of pushback,” one Reddit user wrote.
Another noted: “It just screams that this company wants to scam you with every fee it can. You’re already getting a monthly fee.”
Peloton did not comment on the backlash.
Its blog post said the initiation fee was meant to “ensure these new members receive the same high-quality onboarding experience Peloton is known for.”
The former pandemic darling closed Monday at $4.90 a share, a steep drop from when shares peaked at $162 in 2020.
Last week, the company reported its first quarterly sales increase in two years — albeit a tiny 0.2% bump – as its tries to right the ship after a tumultuous couple of years that included the ouster of its founder John Foley, massive layoffs, product recalls and federal fines.
“Our improvement in profitability reflects our continued focus on aligning our costs with the size of our business,” Peloton said in the letter to shareholders.
Used bike sales contributed to a 16% increase in subscriptions in the quarter ended June 30, the company said.
The $95 fee will include a “virtual custom fitting so members can get the most out of their first ride,” according the company, which will also ensure that second-hand bikes come with the equipment’s “history summary.” New members will also get discounts on accessories including bike shoes, bike mats and spare parts.
A start-up that sells, purchases and delivers used Peloton bikes said the perks don’t seem to add up.
“To put it simply, it sounds like a tax on the used Peloton market,” said Ari Kimmelfeld, co-founder of Trade My Spin, which is offering a $95 rebate to subsidize the fee.
The company, launched in March, has sold more than 2,000 Peloton bikes.
It resells the Pelotons for between $500 and $700 — a bargain compared to the price of a new bike: between $1,200 and $3,000.
Trade My Spin’s prices are also less expensive than Peloton’s refurbished bikes, which start at $1,149.
About 25% of the 4.5 million Peloton bikes and treadmills that were manufactured since 2019 are not being used, according to Trade My Spin research.
Peloton said the start-up’s research is not accurate.
“While Peloton appreciates entrepreneurial spirit and innovation, the data provided by Trade My Spin is not accurate. We won’t go into further detail about our sales numbers,” the company said in a statement to The Post last month.
