Tech

Peloton employees say company sold rusty bikes to unwitting customers

Current and former employees tell the Financial Times that “Project Tinman” was an organized effort within Peloton to cosmetically alter and sell rusted exercise bikes to customers without their knowledge.

A tired woman is resting after training on a exercise bike
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Things are deteriorating rapidly for Peloton. Last month the fitness equipment company haled the production of its internet-connected, stationary bikes amidst lower demand — layoffs ensued, and now that the brand’s value has plummeted by 84 percent over the last year Amazon is rearing its head for a potential buy-low acquisition. Now, a recent report suggests Peloton has been purposefully selling rusted bikes to customers for thousands of dollars. Yikes.

According to documents seen by the Financial Times, higher-ups at the company were supposedly aware of rusting on “non-visible parts of its spin bikes,” and opted to both conceal the deterioration and then sell them to customers as new. Keep in mind that the base level bike, without any added tech, starts at around $1,500, while the internet-connected bike starts at close to $2,500.

The concealment was dubbed internally as “Project Tinman,” and reportedly involved the use of a “rust converting” chemical solution that hid corrosion that caused paint to flake off.

Well-oiled machine?— A Financial Times report notes that it became “standard operating procedure” to hawk rusted bikes. Warehouse workers were tasked with identifying rust and evaluating the level of corrosion to determine whether or not the bike in question could still be sold. Based on the evaluation, solution was then implemented to conceal the corrosion.

However, due to to the subjective nature of these eye-tests, one worker in particular told FT that there was pressure to mark bikes in better condition to keep pace with 2020’s pandemic-related demand.

Peloton denied these claims and “Project Tinman” altogether, telling the Financial Times: “There was no direction by Peloton to reclassify or deem this inventory unsaleable and it is against Peloton’s policy and practices for Peloton to put in the market unsaleable inventory. If anyone did so, they were acting against the company’s policies and practices.”

First-hand testimonies from warehouse workers contrasted directly with this statement — several workers who had been inspecting bikes told the Financial Times “that some were sold with severe rust.” A current employee went on the record to note that the practice even carried over into Peloton’s premium Bike Plus.

The Financial Times reports Peloton even developed its own terminology to make the rust sound like an intended feature: “cosmetic oxidation.” No matter what you call it, it’s hard to imagine Peloton customers would be okay with paying premium prices for a brand-new, rusty, exercise bike.