The peloton is in and we all know what companies do when that happens. They take it out on consumers. To that end, the exercise machine maker has just announced that it will charge a $95 “used equipment activation fee” to anyone who buys one of its machines on the second-hand market. .
The company informed about this in the letter to the shareholders of the fourth quarter of 2024. The rather hefty fee will apply to any machine purchased directly from the previous owner, meaning anything purchased through Craigslist, Facebook Marketplace, or heck, even the neighbor down the street. Without a $95 tithe to the church of Peloton, the machine will not be able to access any of the classes or features the company has become famous for.
The company says this activation fee is to ensure new members “receive the same high-quality onboard experience that Peloton is known for.” However, in a recent earnings call, a company representative was more transparent, calling the fee “a source of incremental revenue and gross profit.” .
Users who pay this fee will be treated to a “virtual personal fit” in the case of Peloton Bike and Bike Plus. They’ll also get a hardware summary showing how much the device was used by the original owner, just in case the seller tries the whole “I’ve only used it once” thing. Peloton also says these second-hand buyers will get discounts on accessories like shoes, mattresses and spare parts. So it’s not all bad.
Also, the $95 fee does not apply to those who purchase a refurbished vehicle directly from the company or its third-party distribution partners. Only those who sell or buy through traditional used equipment channels must pay trolling fees.
Buying a pre-built Peloton car was one of the great joys of being a consumer. For example, a standard Bicycle sells for around $1,500 new, but you can buy a used bike online for $300-$500. Now this price rises to 400-600 dollars. Peloton also requires a monthly membership fee to access content, which is around $44.
This isn’t the only move Peloton has made recently that could be seen through a cynical lens like nickel and dime consumers. For those who have, it has increased subscription prices . There’s still a free tier, but it doesn’t offer access to any live classes.
However, a recent earnings call offered a bit of good news for Pelo-heads (I just made that up). Shares rose 15 percent this quarter, and losses narrowed to $30 million from a year-over-year estimate of $241 million.
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