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The FTC's Lina Khan said mistreatment of customers signals that a company has monopoly power. Maybe Peloton is heading that way?
Peloton is both a product manufacturer and a service provider; setup fees are common with many service providers. For example, if you bring a phone you bought elsewhere to your carrier, they'll charge a fee to activate it for their network.
I don't think it's that common with companies that are both manufacturers and service providers. That'd be like Apple charging you $75 if you wanted to use iCloud+. It makes used products less valuable, which ultimately hurts your brand image in the long-term, even if you might be able to boost services revenue for the next quarter or two.
Earlier quoted context omitted.
> It's not even as if the bike is disabled when bought used, you can just use it like any other spin bike happily. While that’s true, a Peloton attracts a premium price above regular spin bikes. So if you had no intention of using the software you’d just buy a cheaper bike. If you do intend to use it you now have to add $95 to whatever price you’re paying.
Do they command a premium when used? I have one that I got for free, YMMV.
I thought they were stationary.
Peloton is both a product manufacturer and a service provider; setup fees are common with many service providers. For example, if you bring a phone you bought elsewhere to your carrier, they'll charge a fee to activate it for their network.
This peloton fee has no good reason to exist. None.
The effect of this should be to reduce the price of used peletons by around $95 - i.e. effectively seller pays. I imagine that's the thinking behind this (ie it only affects the customer who's leaving the service), but it probably leaves a bad taste in the mouth of the buyer anyway, which doesn't feel like great business
They are losing money still so desparate moves like this I guess make sense, but adding friction to the new subscriber workflow just seems wild. There's a reason why just about every subscription out there offers free trials/discounted first months. It's to get you in the door. It's not even as if the bike is disabled when bought used, you can just use it like any other spin bike happily. This ONLY effects people who…
Peloton is both a product manufacturer and a service provider; setup fees are common with many service providers. For example, if you bring a phone you bought elsewhere to your carrier, they'll charge a fee to activate it for their network.
I've never been charged a fee to activate a device on a new carrier, probably because they'd much rather have the money from my monthly subscription - in fact I've seen offers from carriers to buy out your current contract if you switch to them.
https://www.att.com/legal/terms.otherWirelessFeeSchedule.htm...
They may waive the fee, but it's there.