Peloton expands Bike rental program nationwide
- Peloton will be expanding its Bike rental program nationally.
- The base-level Bike and subscription will cost customers $89 a month plus a $150 setup fee.
- The announcement comes just one day after the company announced a significant leadership shake-up under new CEO Barry McCarthy.
Peloton will expand its rental program nationally, the company said Tuesday.
The announcement came a day after Peloton unveiled sweeping leadership changes, including the departure of co-founder, executive chairman and former CEO John Foley as well as co-founder and Chief Legal Officer Hisao Kushi.
The rental program began in test markets at Peloton's physical store locations in Texas, Florida, Minnesota and Colorado. For $89 a month, customers will be able to rent an original Peloton Bike and obtain a membership. There is an additional $150 setup fee. They can also opt for the Bike+ for $119 monthly.
The rental program comes soon after the company started selling certified preowned Bikes and the announcement that Peloton would begin selling products on Amazon. The moves work to increase Bike accessibility, attracting new users to Peloton's subscriber base.
They're part of CEO Barry McCarthy's aggressive turnaround plan. He took over the role from Foley early this year after the company announced massive layoffs. Since then, McCarthy, a Netflix and Spotify veteran, has pushed for a more subscriber-centric business model.
"I don't think of us as being a hardware company. We're a software company. We're in the business of engineering a great user experience," McCarthy said at the Goldman Sachs Communacopia and Technology conference Monday.
He added: "A very small percentage of the monetary value we collect from users we collect when you purchase a piece of hardware. The vast majority is the lifetime value that is accumulated month over, month over, month over month in the form of the $44 worth of subscription fee."
Shares of Peloton closed down around 10% amid a broader market rout.