Peloton’s app update is a total disaster

While Peloton has garnered a lot of attention and a bit of a stock pop this week with its TikTok deal, the buzz has not been strong enough to drown out the pronounced vocal outrage among Peloton app users about a dramatic change the company implemented last month.

Starting on December 5, Peloton introduced two new membership options to replace legacy subscribers’ existing $12.99 per month version. Members like myself could either stick with what is now called Peloton App One at the previous price, and enjoy full access to Peloton’s non-cardio offerings—as in no more cycling, the thing Peloton is synonymous with—or we could “upgrade” to Peloton App+ and enjoy all pre-December 5 features. The price for this upgrade would be a cool 85% increase, to $23.99 per month.

To be fair, Peloton didn’t completely eliminate cycling for App One users; those who chose to stay would be able to access three cardio classes per month. To be even more fair, however, most people who are exercise-oriented enough to buy an expensive piece of fitness equipment and a not-cheap app to go with it probably prefer to work out more than once every 10 days or blow through their entire month’s allotment in one afternoon with a warm up, a regular class, and a cool down.

A lot of subscribers, who also have access to the internet, were understandably upset about these changes.

“I just don’t get the point of even having the basic membership if it’s only three classes a month,” wrote one member on the private Facebook group, Peloton Digital App Users, where the app update has proven controversial.

“THANK YOU, Peloton, for jacking the price up 100% for the same service,” wrote a member of another equally incensed private Facebook group, Schwinn IC4 and Bowflex C6 Riders. “Because I switched to Zwift and am having the time of my life!”

Peloton’s shifting gear

Advertisements often trot out a familiar saying when introducing a brand redesign: New look, same great taste. This succinct shorthand has reassured millions of change-averse consumers since the Mad Men era that a thing they loved would retain everything they loved about it, even if it suddenly appeared a little different.

No rosy spin exists, however, to explain why a beloved product or service has suddenly gotten more expensive. New price, same great taste doesn’t have quite the same ring to it, so advertisements often keep quiet about cost increases, even though consumers tend to be exponentially more averse to a higher price than they are to an updated typeface or whatever. Cost increases for subscription services were already hard to sell and to swallow, well before a more extortion-like iteration of them began creeping in recently. If there were a pithy slogan for this developing trend, it would be something like: Same price, significantly worse taste . . . and an option to pay more to get what you had before.

With Peloton’s app update, the connected fitness icon has now become the gold standard of this new model—and a troubling indicator of things to come.

It would be no exaggeration to say that Peloton helped get me through the pandemic. In the winter of 2020, while stuck indoors indefinitely, my wife and I bought a cheap knockoff of the company’s signature bike—with the perfect cheap knockoff name, Echelon—and sprang for the Peloton app. By the following winter, I was on a first-name basis with a coterie of telegenic cycling instructors, an astonishing number of whom have since published books. I lost most of my pandemic weight and hung on to some of my sanity, thanks in no small part to having the on-demand stress-release of at-home exercise.

A vast population of homebound folks like me, even with my Faux-loton, helped the company not only make it through the worst part of the pandemic, but achieve staggering, unsustainable growth during that time. Peloton’s market cap hit a high of $50 billion at one point.

And then people started leaving their homes.

In 2022, as a substantial portion of the company’s inflation-addled users considered taking up jogging, the financial outlook for Peloton’s future began to dim. Unsustainable growth, it turns out, is indeed unsustainable. The company laid off thousands of staff members and saw an executive exodus as well. After teasing an “epic comeback” the following February, Peloton ended up issuing a massive recall for its exercise bikes in May, followed by more layoffs later in 2023. Obviously, something had to give.

Peloton’s year-end “gift”

Here’s how I found out that what had to give was me.

One day last December, I hopped on my Echelon and discovered that the cadence sensor I’d bought to monitor my speed no longer synced with the Peloton app. It appeared that the company was cracking down on users who flouted the four-figure price tag of its bikes. Fair enough! I could learn to live without knowing whether I was biking precisely as fast as one-time Dancing with the Stars contestant Cody Rigsby commanded on any given afternoon.

Upon finding in my inbox an unread May 2023 email from Peloton, I discovered that a lot more was changing beyond my ability to use a cadence sensor. While I had arguably been given advance notice, my reaction would have been the same even if that email had not fallen through the cracks. Were that cadence sensor attached to my wrist at that moment, it would show that I canceled my membership with incredible speed.

As someone who used the app almost exclusively for cycling, what would even be the point of sticking around?

Peloton did not provide an on-the record comment for this story, but CEO Barry McCarthy noted back in a May letter to shareholders how far the company had expanded in its offerings beyond cycling. “In Q3 [FY 23], by way of example, 57% of all workouts were not cycling related. 62% of active Members participated in non-cycling activities—strength training, yoga, meditation, and other modalities.” Reading between the lines, however, if 43% of Peloton workouts are cycling workouts, across a total of 12 categories, then cycling remains Peloton’s core offering. There’s a reason none of Peloton’s meditation instructors has yet appeared on Dancing with the Stars.

If the other workout options are so popular, a reasonable thing to do would be to silo them in a premium tier and allow basic users to retain the company’s central function. Removing instead what is clearly the essential offering from a service degrades that service to the point of redundancy. Presenting the option to get it back as an “upgrade”—at a whopping 85% markup—is an insult.

Why Peloton’s “plus” strategy is a minus others will follow

Unfortunately, we will likely see more of this from other companies in the near future. Elon Musk led the charge last spring when he created an $8 per month premium tier on “Twitter” and intentionally degraded the non-paying user experience to urge folks to start subscribing. Months later, Amazon announced that, starting in early 2024, Prime members would no longer be able to enjoy ad-free viewing of its Prime Video’s film and TV offerings. Instead, they will either have to get used to a worse experience for the same price, or pay an additional $35.88 per year for the same service. It’s anybody’s guess which tech giant will foist this strategy on its subscribers next.

Companies can either hike up their prices or not, but this “Nice service you got there, it’d be a shame if anything happened to it” model of squeezing consumers is just ruthless. Peloton’s version of it feels particularly like a betrayal. As Bloomberg reported last August, the company is now incentivizing businesses to offer its services as a workplace benefit, and adding Peloton equipment to local gyms, apartment buildings, and hotels.

This approach suggests that the company now views the individuals who fueled its explosive growth in 2020 as less important to its bottom line than ever. The company is gambling that users who can ill afford an 85% price hike will accept a paltry whiff of their previous service rather than walk. They seem convinced that there’s enough brand affinity out there to make the impact of those who choose to opt out negligible. Good luck with that!

Brand affinity only goes so far. Like many others currently working up a sweat by venting in Facebook groups, I’d rather seek out a new service with the same great taste. Peloton may have helped me get through the worst part of the pandemic, but I feel zero obligation to help get the company through its post-pandemic inflationary whiplash. As Don Draper memorably said, “That’s what the money’s for.”

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