After 70 injuries to children and pets and one child death, Peloton voluntarily recalled its Tread and Tread+ treadmills this week. The recall was done at the urging of the U.S. Consumer Product Safety Commission (CPSC) who issued an urgent warning to consumers about the products’ dangers in mid-April. At that time, CPSC said it was aware of 39 incidents involving injuries to children and pets, including one child death. Peloton confirmed Wednesday that there have been 70 reported incidents and one child death.
CPSC’s April consumer warning
“CPSC staff believes the Peloton Tread+ poses serious risks to children for abrasions, fractures, and death. In light of multiple reports of children becoming entrapped, pinned, and pulled under the rear roller of the product, CPSC urges consumers with children at home to stop using the product immediately,” said the CPSC in an April 17 statement to the public.
Consumers who purchased one of the treadmills should stop using the products immediately and contact Peloton for a full refund or repair. Peloton stopped the sale and distribution of the treadmills.
After the CPSC issued its warning in April following the March report of a child’s death, Peloton issued its own statement, disagreeing with the CPSC’s warning. Peloton encouraged members to keep children, pets and objects clear of the equipment during workouts and to remove the safety key and keep it out of reach of children when not in use.
Peloton’s April rebuttal
“Peloton invited CPSC to make a joint announcement about the danger of not following the warnings and safety instructions provided with the Tread+, and Foley asked to meet directly with CPSC. CPSC has unfairly characterized Peloton’s efforts to collaborate and to correct inaccuracies in CPSC’s press release as an attempt to delay. This could not be farther from the truth. The company already urged members to follow all warnings and safety instructions. Peloton is disappointed that, despite its offers of collaboration, and despite the fact that the Tread+ complies with all applicable safety standards, CPSC was unwilling to engage in any meaningful discussions with Peloton before issuing its inaccurate and misleading press release,” said John Foley, Peloton CEO, in its April 17 response to the CPSC.
CPSC statement
Robert S. Adler, acting chairman of the CPSC, issued a statement following the voluntary recall. Here is an excerpt:
“I am pleased that the U.S. Consumer Product Safety Commission and Peloton have come to an agreement to protect users of the Peloton Tread+ and Tread products. The agreement, which the Commission voted this morning to accept, requires Peloton to immediately stop selling and distributing both the Tread+ and Tread products in the United States and refund the full purchase price to consumers who wish to return their treadmills. The agreement between CPSC and Peloton is the result of weeks of intense negotiation and effort, culminating in a cooperative agreement that I believe serves the best interests of Peloton and of consumers,” Adler said.
“Today is a day when we have taken steps to prevent further harm from these two products. As an exercise enthusiast, I know how important treadmills can be to the people who use them. But, I also know that those who use exercise equipment want to be sure that the only pain they might feel at the end of the workout is a sore muscle from their exertion, not a serious injury from a defective product,” added Adler.
Peloton statement
Initially, Peloton ignored the CPSC’s recall recommendation, but they conceded and complied with the voluntary recall.
“The decision to recall both products was the right thing to do for Peloton’s members and their families. I want to be clear, Peloton made a mistake in our initial response to the Consumer Product Safety Commission’s request that we recall the Tread+. We should have engaged more productively with them from the outset. For that, I apologize. Today’s announcement reflects our recognition that, by working closely with the CPSC, we can increase safety awareness for our Members. We believe strongly in the future of at-home connected fitness and are committed to work with the CPSC to set new industry safety standards for treadmills. We have a desire and a responsibility to be an industry leader in product safety,” said Foley.
Peloton membership
Peloton operates under a hybrid business model with product and membership sales. Its fitness products are available for purchase outright or under a monthly installment payment plan. Peloton membership plans are available to customers separately. The Peloton Tread starts at $2,495. The Peloton Tread + starts at $4,295. Priced at $12.99 a month, Peloton digital memberships give members access to thousands of live and on-demand classes. They include walking, running and other fitness classes which can be done with or without equipment. An all-access membership plan is designed specifically for members who own Peloton bikes or treadmills. It is priced at $39 a month. At the end of the company’s second quarter of fiscal year 2021, the company reported 1.67 million connected fitness subscriptions, 625,000 paid digital subscriptions, and more than 4.4 million members.
Insider Take
There is no way to spin this. This is a tragic situation for everyone involved, but particularly for the Peloton members whose children and pets were injured and the family who lost a child as a result of the company’s faulty equipment. No recalls, repairs or remedies can compensate that family for its loss. While Peloton ultimately did the right thing by agreeing to a voluntary recall, waiting weeks to do so could become a costly mistake. Though the impact is not immediate, we expect Peloton to address the recalls in its May 6 earnings call scheduled for 5 p.m. EDT.
