Peloton

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Peloton's logo. Copyrighted by Peloton, 2012.[1]

Peloton Interactive is an online exercise equipment company based out of New York City. Launched on January 3, 2012 by John Foley, the company combines technology with its stationary workout equipment, ranging in products from a bike to a treadmill, to provide an at-home boutique fitness experience. [2] Peloton’s main goal is to offer flexibility and accessibility in its workouts through live and recorded classes, and various types of workouts beyond its stationary gym equipment such as boxing, cardio, and pilates. As the company has grown in popularity, ethical concerns have also increased concerning the safety of its Tread+ after a child’s death, privacy issues, bullying and misinformation spread on its platforms, and sexism.


History

Peloton's original bike. Copyrighted by Peloton, 2012.[3]

Initial Beginnings

Peloton Interactive was established in 2012 by former Barnes & Noble e-commerce executive, John Foley. [4] Feeling a sharp discord between his instructor-led workout classes and his own self-led workouts, Foley wanted to find a solution that could allow for workouts from the comfort of his home, while still being motivated and led by an instructor. Throughout this first year, Foley created a team and went through the Series A phase of venture capital funding to secure $3.5 million along with $400K initial seed.[5]

In 2013, the first prototype bike was created. This bike model was used to make Peloton’s first Kickstarter video, helping them to not only achieve more brand awareness, but raise $307,000 to continue building Peloton.[6]

In April 2014, Peloton received $10.5 million in Series B phase of venture capital financing.[7] With this money, Peloton improved its initial bicycle model to become ready for actual consumer use. After being put into production and slowly selling, Peloton opened its first studio in New York City neighborhood, Chelsea, where Peloton instructors could record their workout classes for users. While greatly expanding, the production cycle to bring bikes into users’ homes proved to be slower than expected.

In 2015, Peloton raised $30 million in a Series C funding phase.[8] This allowed the company to expand into physical retail locations, as well as speed up the bike’s production. As demand picked up, the company hired a delivery service to personally ensure the Peloton bikes were quickly, efficiently, and successfully brought into consumers’ homes. As 2015 came to a close, Peloton secured another $75 million in funding, allowing the company to focus on expanding its software engineering team.[9]

Steady Growth

Between 2015 and 2020, the company's bikes sold at a steady pace. In 2018, Peloton experienced significant growth as it released its newest product, the Tread+.[10] Shortly after its showcasing, Peloton announced its global expansion plans to move into the Canadian and U.K. market spaces.[11] In May of 2018, Peloton also announced its plan to move into its newly-acquired flagship location in Manhattan West.[12] Scheduled to open in fall of 2019, Peloton signed a 20-year-lease with the goal of creating an in-studio experience for users to join live classes.[13]

On September 26, 2019, Peloton became a public company, pricing its initial public offering at $29 a share under the ticker "PTON."[14] Although starting high, it ended at $27 a share by the end of the year.[15] Investor concerns included that the company's products are considered luxury items and despite large opportunities for growth in the market, consumers had cheaper options for at-home equipment.[16] [17] Some of Peloton's biggest investors include Baillie Gifford & Co., The Vanguard Group Inc., and BlackRock Fund Advisors.[18]

Throughout the Pandemic

As the coronavirus pandemic began in March of 2020, gyms began closing, forcing many to turn to virtual at-home options for exercise. Due to these lockdown restrictions, Peloton saw a significant increase in the sales of its products. Towards the end of 2020, more than 1 million new subscribers joined Peloton's services, and the company saw a 172% increase in sales.[19] Despite this growth, the company also faced longer production and delivery times, especially exacerbated by supply and demand issues experienced by many companies throughout the pandemic.[20]

Products

All-Access Membership

Along with purchasing the at-home gym equipment, users have the ability to buy All-Access Membership. This membership is priced at $39/month and gives users unlimited access to live and recorded classes, leaderboard statistics, and real-time performance metrics. Without purchasing the membership, users can still use their Bike or Tread but have no access to on-demand content and metrics.[21]

Bike

Peloton's Bike and Tread. Retrieved from Treadmill Reviews, 2022.[22]

The bike was first prototyped in 2013 on Kickstarter, with a price tag of $1,500. For its actual consumer release, the bike was priced at $2,245. The bike features a resistance knob for manual control and a large 21.5” sweat-resistant, swiveling HD touchscreen in which users can access hundreds of Peloton classes. With the release of the Bike+, the Bike was repriced to $1,495.[23]

Bike+

On September 19, 2020, the Bike+ was debuted and made available for purchase in the United States, Germany, Canada, and the United Kingdom. Priced at $2,495, it features a completely rotating HD touchscreen measuring 23.8” and a resistance knob for manual control or an auto-resistance option to follow along with instructors.[24]

Tread

Between November 2020 and March 2021, the Peloton Tread was sold through invitation-only releases and Peloton showrooms. This new tread was priced at $2,495. The Tread was built to give users more total body workouts, with features such as intuitive speed, incline control knobs, and jump buttons to simulate the running experience. In addition to these features, it also has a 23.8” touchscreen with speakers, a small frame so as not to interfere with one’s living space, and a 59” belt.[25]

On May 5, 2021, the U.S. Consumer Product Safety Commission (CPSC) and Peloton announced a recall for the Tread.[26] The Tread was recalled for the problem of its touchscreen detaching and falling, which posed a big risk for consumers. At the time of its recall, Peloton had received eighteen reports of the screen loosening and six reports of it detaching and falling.[27] While there were no major injuries from this issue in the United States, users in Canada and the United Kingdom faced minor injuries such as bruises and abrasions. Consumers who possessed the Tread were advised to immediately halt use of it and either return it for a refund or a repair.

On August 24, 2021, Peloton announced that the Tread would be coming back with more integrated safety features than before. These new safety features include the Tread lock in which users must enter a four-digit passcode to unlock the product before every use and a safety key to come to a quick stop during the workout, if necessary.

Tread+

The Tread+ was on the market since 2018 and until April 2021. The Tread+ was the premium version of the Tread, available for purchase online and in Peloton showrooms. The Tread+ was priced at $4,295 and featured a shock-absorbing slat belt to lessen joint impact, 32” touchscreen, and a “Free Mode” button which turns off the Tread+ motor to allow one to run freely on their own.[28] Although these features differentiated it from other treadmill competitors, the features also made it riskier than other similar products. As Peloton began receiving growing reports of injuries by the Tread+ and eventually after a child's death on the product, the U.S. Consumer Product Safety Commission (CPSC) and Peloton announced a recall for the Tread+ on May 5, 2021.[29]

Features

Leaderboard

Leaderboard during a Peloton class. Retrieved from Connect The Watts, 2021.[30]

When a user takes a class, the Leaderboard shows the user their total output, personal record, and ranking among others in the class. Along with showing one’s own ride statistics, the Leaderboard also allows users to see the metrics of their fellow riders taking the class, allowing every user to compare and compete with one another to get to the top of the class’ Leaderboard. [31] While the Leaderboard allows for competition, it also provides a space for community encouragement. Through the High-Five function, users can tap on other riders on the Leaderboard and send them a virtual “high-five.”

Hashtags

Hashtags allow community members to interact with one another. Adding hashtags to one’s profile allow connecting with others through similar interests, hobbies, locations, and more. Up to ten hashtags can be added to one’s account and users can choose one hashtag to be presented along with their name and metrics on the Leaderboard while in a class.[32] Users can also click on their hashtag during a class and be shown other riders in the class with the same hashtag.[33]

Video Chat

Every Peloton product comes with a built-in camera, allowing users to video chat their friends during classes. In order to video chat, the user must first enable it in settings. From there, both users must be mutually following one another before an invitation to video chat during class can be sent.[34]

Following Friends

Peloton users have the ability to connect with others on the platform. By searching up a user’s Leaderboard name, they can then follow that user. Following another user allows one to see their workout history, as well as whether they are currently working out. If two users mutually follow one another, they have the ability to video chat during class, as well.

Ethical Concerns

Bullying, Harassment, and Offensive Behavior

Through features such as the Leaderboard and Hashtags, Peloton has created a virtual fitness community. However, with this more social aspect being built into its platform, typical negative consequences such as misinformation and bullying seen on other social networks have also arised. While Peloton aims to create a positive, encouraging community through their social features, it has also led to certain voices being amplified.

With Peloton’s Hashtag feature, users can mark themselves into various niche interest groups from #PeloPets to #PelotonNewbies. Although these hashtags were created with the intention to make a large user base feel smaller and more social, it has also created unforeseen consequences, made especially prominent in recent years.

After the 2020 election, many social media sites were flooded with tense discourse surrounding the results. More specifically, sites saw an increase in the spread of misinformation concerning the election. While Peloton’s Hashtags have typically been used as community identifiers, these became used as a source for speaking out about the election. As users can create their own hashtags, Peloton saw an increasing number of #StopTheSteal hashtags being created on their platform in January 2021.[35] Citing their community guidelines, Peloton banned these hashtags as they fall into the category of “hate, offensive, and obscene speech,” as well as “bullying, harassment, and other offensive behavior.”[36] In response to these measures taken by Peloton, new Hashtags began surfacing on the platform such as #StopTheCensorship, #StopTheSteall, and #StopTheSteel.[37]

Along with these election-related tags, Peloton saw an increase in racial slurs being used as usernames on the Leaderboard. While the company began banning these usernames that were blatantly offensive, they have also begun banning phrases that are coded references for more extremist, racist beliefs. Peloton still allows usernames and hashtags that support political causes such as #BlackLivesMatter, but the company now bans anything from slurs to dog whistles.[38]

While Hashtags help to bring together and identify different communities, Peloton has struggled with banning inciteful groups both on and off the platform. Created on February 25, 2018, the Official Peloton Member Page on Facebook unites Peloton users beyond the platform to engage in discourse about personal milestones, favorite classes, and more. Along with political discourse spreading heavily throughout its Leaderboard, seen through an increase in QAnon-related tags, its Facebook page was also flooded with these conversations.[39] In 2020, Peloton banned political talk from its platform, citing that these “discussions quickly become charged and often create a negative environment.”[40]

When the pandemic first spread in 2020, Peloton saw growth of its community, and its Official Peloton Member Page hit 300,000 members. In order to join the page, members need permitted access to ensure they are actually involved or interested in the Peloton community. With this increase in users joining the closed group, Peloton stepped up its own moderation of the typically member-led page due to complaints growing about members experiencing bullying and hate speech within the group.[41] To combat this increase in bullying between members, Peloton required all new posts to be approved by a moderator before appearing on the page. Despite this change, toxic language and inappropriate bullying can still be found in the comments of these approved posts. Peloton has since continued revising its community guidelines in order to ensure every member feels safe on this page.[42]

Privacy

As the Peloton gym equipment is connected to a large network of other users, concerns have been raised about privacy on its platform. The product tracks user’s metrics and can be paired with one’s music applications, fitness tracking devices, and social media accounts. At the beginning of 2021, Peloton discovered a bug on its platform that would allow any person to access a user’s personal information.[43] First discovering this bug was Jan Masters, a security researcher at Pen Test Partners.[44] Masters realized he could make unauthenticated requests to Peloton’s API to receive a user’s account data without any permissions necessary. This bug would allow anyone to access a user’s age, gender, and location, and even details that were kept private on one’s profile.[45]

On January 20, 2021, Masters reported this bug in Peloton’s API to the company.[46] Peloton was given a 90-day deadline to fix this security breach, which is the standard amount of time security researchers give companies before the issue can be made public.[47] After sending an initial acknowledgment of the bug report, Peloton did not fix the bug by the deadline. Instead, the company changed API requirements so only members could access these API requests and still have the ability to see personal, private information of others on the platform.[48] After the deadline passed to fix the bug, media outlets reached out to Peloton and the company confirmed in May 2021 that the privacy concern had since been completely fixed.[49] The company declined to confirm if its platform’s data had been exploited in any way while the faulty API was active.[50]

This issue initially came to light as newly-elected President Joe Biden began moving into the White House, and faced cybersecurity concerns as to whether he could bring his Peloton with him. With its built-in camera and microphone, advisors felt concerned about the safety of the product.[51] Ultimately, security advisors stated that his Peloton would most likely go through security vetting and changes to make it less vulnerable to security breaches in the White House.[52]

In June of 2021, it was revealed by security company McAfee that any hacker with direct access to Peloton can gain control of the equipment’s microphones and cameras, and can monitor users.[53] Furthermore, as Peloton allows other applications to be paired with its products, such as user’s music applications and social media networks, the threat extended to these applications, as well. Attackers had the ability to add applications disguised as Netflix and Spotify that required user login credentials, which could then be utilized for malicious use.[54] The security company had reached out to Peloton on March 2, 2021 with these findings. After confirming the bug, Peloton released a software update that would resolve the issue.[55]

Tread+ Recall

On May 5, 2021, Peloton recalled two of its treadmill products, with its Tread+ specifically recalled for being tied to the death of a six-year-old child who was pulled under the treadmill’s slats.[56] This issue raised ethical concerns, with users and lawmakers troubled by Peloton's slow reaction to recall the Tread+ and refusal to work with the Consumer Product Safety Commission (CPSC) after the death.[57] Along with this death, Peloton also received 72 reports of adults, children, and pets being pulled under the treadmill, as well.[58] Children were involved in 29 of these reports, and many of their injuries included broken bones, second- and third-degree abrasions, and lacerations.[59]

The company faced national backlash during this recall, as Peloton initially refused to cooperate with CPSC for weeks.[60] After a child’s death from the Tread+ in March 2021, Peloton did not want to provide federal safety regulators with the identity of the child, due to privacy concerns.[61] This refusal to share information about the child led to a delay in the safety investigation by the Consumer Product Safety Commission, as the agency had to be issued an administrative subpoena to receive this information.[62]

After Peloton refused CPSC’s request for a recall, the agency issued a statement encouraging consumers to immediately stop using the product. In response to this, Peloton stated these claims were “inaccurate and misleading.” Many consumers were upset with this decision to continue selling the product and the response to CPSC’s concerns. After this backlash, Peloton agreed to cooperate with CPSC and recall its Tread+ and Tread, with the CEO John Foley releasing a statement, saying, "We should have engaged more productively with them from the outset."[63] Despite this acknowledgement, many Peloton consumers were upset by the handling of this issue and Peloton's initial refusal to halt production on their products at the expense of their own users' safety.[64] Senator Richard Blumenthal, who chairs the senate subcommittee that oversees the CPSC, released a statement after the recall, saying “This recall is the right step – though dangerously delayed.”[65] After the recall, reports surfaced of concerned parents attempting to send back their Treads being met with refusal from Peloton to offer a solution like a refund.[66] In response to these reports, Peloton began offering to move Tread machines into rooms where children and pets can't access it, as well as include passcode lock protections in future software updates.[67] When the fight between CPSC and Peloton first surfaced in April 2021, Peloton’s stock went down 7%, and after the announcement of the recall, stock prices fell another 14%.[68] At the time of the recall, the Tread machines accounted for 12% of Peloton's equipment revenue.[69]

While the Tread is being sold again with new safety features as of August 2021, the Tread+ is still not for sale.

Sexism

Peloton raised ethical concerns after releasing an advertisement in December 2019 that was dubbed as sexist and dystopian. In a 30-second holiday commercial, the company showed a man gifting his wife a Peloton for the holidays, insinuating she needed to exercise more often. Throughout the course of the short commercial, the wife documents every ride, eventually showing the husband her self-made documentary the following Christmas, and thanking him for helping her change herself.[70] Consumers who felt upset after its release sparked concerns about the lifestyle Peloton seemed to be encouraging, specifically highlighting that the woman who begins using Peloton to transform herself, was already thin and attractive at the beginning.[71] After the advertisement was released, Peloton's stock dropped by 9 percent, but the company did not take the commercial off the air.[72] In response to this criticism by users, Peloton released a statement, explaining, "While we're disappointed in how some have misinterpreted this commercial, we are encouraged by, and grateful for, the outpouring of support we've received from those who understand what we were trying to communicate."[73]

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