The early months of the coronavirus pandemic were a boon for Peloton. Nationwide shelter-in-place orders inspired a surge in purchases of its luxury stationary bikes and treadmills and created a massive new, captive audience for the $12 billion exercise technology company’s streaming video workouts. But it also caused consternation and conflict inside Peloton's nascent logistics operation, where workers feared the company’s “high-touch” in-home delivery policy put them at risk of contracting the novel coronavirus.
For Peloton, which had to deal with manufacturers in Taiwan, a spike in demand, and an in-home delivery operation across the US, the crisis was something of an operational nightmare. “We’ve had to scramble on a number of fronts,” CEO John Foley told Time.
It was also an unprecedented opportunity to drive sales at a time when gyms were closed and people were eager to find new ways of safely exercising at home. Peloton jumped at the chance to promote its brand: Having designated its business essential, the company extended free trials of its streaming video content, shipped tens of thousands of bikes in a matter of weeks, and exceeded its revenue targets; it racked up more than half a billion dollars in revenue in the first three months of 2020.
“Peloton really doesn’t care about our safety or health.”
But while Peloton’s leadership was scrambling to keep up with consumer demand and rapidly expanding market share, the warehouse and delivery workers who assemble, repair, and deliver Peloton equipment were apoplectic. According to internal communications reviewed by BuzzFeed News, some felt the company’s decision to designate delivery of pricey exercise bikes as essential during a pandemic was reckless and put them in danger of contracting the coronavirus.
“I’m actually livid right now,” one Peloton employee wrote in a post to an internal company message board. “Peloton really doesn’t care about our safety or health.” Others echoed concerns that the company wasn’t taking the risk of their exposure seriously.
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In response to a detailed list of questions, Peloton offered a statement noting that it has followed CDC and public health guidelines throughout the pandemic and referred BuzzFeed News to the delivery protocols on its website.
Peloton bikes and treadmills retail for between $2,000 and $5,000. The frames are manufactured in Taiwan and shipped to the US, where most of them are assembled and stored in one of the company’s 23 warehouses to be delivered and installed in homes by its employees driving black Peloton vans. (Slightly less than half of the deliveries are handled by XPO, a third-party logistics company with allegedly poor service that has caused problems for Peloton’s brand, according to Business Insider.) When Peloton went public in fall 2019, the company said it considers itself in part “a logistics company that provides high-touch delivery, set up, and service for our Members.” Delivery and installation of the bikes costs customers $250.
Maintaining that promised level of service during a period of rapid growth in the midst of a global pandemic was a challenge. “There’s rocket fuel in your business, and your business has just been displaced and you’re no longer together, you’re trying to change the engines on the plane when you’re in the air, or whatever the metaphor is,” CEO Foley told Time. “It’s tricky operational stuff.”
For some Peloton employees, the idea of carrying out the company’s “high-touch” in-home delivery service during a highly communicable pandemic was more than tricky — it felt like a very serious health risk.
On March 12 — as professional sports and music performances were canceled and President Donald Trump banned travelers from Europe from entering the country — a Peloton human resources employee posted a note to an internal employee forum addressing the quickly spreading coronavirus threat. “I know there have been some questions around procedures with the Coronavirus (COVID-19) illness,” the HR rep wrote.
Directed at employees in Peloton’s field operations division, the message said the company would be “increasing janitorial services at each site” and providing gloves and sanitizer wipes, which it recommended employees bring “into the home when delivering.” Peloton did not respond to questions from BuzzFeed News regarding when gloves were distributed to delivery workers, or whether they were provided with masks.
“That $100 really told y’all what they think we’re worth after killing ourselves for them peak season.”
Some employees were angered by the company’s expectation that they keep delivering to homes during a pandemic.
“Are we taking the steps and asking these clients if they have travelled out [of] the country within this time? If they have any signs of these symptoms beforehand?” said one reviewed by BuzzFeed News. “We have to take extra precautions…”
“There should be some kind of pre-screening [of] members,” said a second, “to also not only protect customers but the Peloton Field Ops Team as well.”
“Just learning more about the coronavirus, it said that symptoms can show 2 to 14 days after contact,” said a third. “Due to that statement alone, I feel us field specialist[s] should be restricted until further notice from delivering our products.”
The unrest among employees didn’t go unnoticed. Hours later, a regional Peloton manager replied, saying, “I just wanted to let you all know that we really are taking everyone’s concerns extremely seriously.”
On March 15, CEO Foley wrote a public letter about the company’s response to the coronavirus pandemic in which he said that all Peloton office employees around the world should work from home if possible. Retail stores would close, trainers would film fitness content in “closed studios,” and customer support agents would work remotely. But warehouse and delivery workers, Foley wrote, “will continue to deliver Peloton Bikes and Treads to people’s homes, while taking extra precautions to address the safety of both our Members and our team.”
“Our goal is to bring the Peloton experience ... to as many new members as we can, particularly during this time of uncertainty.”
“Our goal is to bring the Peloton experience — and our community — to as many new Members as we can, particularly during this time of uncertainty,” he continued.
Foley also decided to offer to deliver employees $100 a day (pre-tax) “hazard pay.” But, according to comments on a second internal message board post, the gesture hardly mollified employees.
“Y’all really sat down in a room came up with this plan and thought we’d be ok with risking the safety of our loved ones for $100[?]” said one comment. “[If] y’all really care start administering screenings to let us know if we good or not, or just keep us home.”
“That $100 really told y’all what they think we’re worth after killing ourselves for them peak season,” said another.
It wasn’t until March 19, a week after employees first raised an alarm, that Peloton paused orders of its treadmill, which requires in-home delivery and assembly due to its size. The company continued to sell bikes, instructing customers to open their front doors and back 3 meters away to allow the delivery workers to leave the bike on the “the entrance to your home or apartment unit.”
“Since states and regions began deploying shelter in place orders, we followed the guidance of local governments, the CDC and other public health agencies in our warehouses and implemented a threshold delivery protocol, which can be found here,” a spokesperson for Peloton wrote in a statement. “We actively monitor the situation to make any necessary adjustments that allow us to keep our team safe and bring the Peloton experience to our community.”
In the end, some Peloton facilities, including a few warehouses, were forced to shutter due to employees who tested positive for COVID-19, according to a former employee who requested anonymity for fear of retaliation. On April 7, the company stopped broadcasting live exercise classes from its New York City studio — which had been deemed an essential business by the state — after someone who worked there contracted the disease.
Peloton declined to respond to specific questions about infections among its staff.
Any Peloton devotee will tell you that the draw of membership isn’t as much the expensive equipment as it is the community, competition, and coaching found in the company’s online classes. A peloton is a group of cyclists riding together, and the company’s trainers and executives love to incant its hashtag-ready slogan, “One Peloton,” emphasizing that members, trainers, and staff are all part of the same big team. The coronavirus pandemic tested the strength of that team, but Peloton — with thousands of new members and skyrocketing stock prices — came out on top.
“As a New York City–based company, we've seen firsthand the magnitude of the COVID-19 crisis,” Foley said on a May 7 earnings call, “and we offer a heartfelt thank you to all of those working tirelessly on the front lines to battle this epidemic.”