Peloton workers say that rusting bikes were knowingly sent to customers as the firm grappled with soaring demand and a lack of inventory, a report says

• Peloton received bikes with rust issues from its supplier in 2021.
• Warehouse workers told the FT that some tarnished bikes were knowingly sent to customers.

A group of Peloton warehouse workers has revealed how the firm knowingly sent rusting bikes to customers as it struggled to cope with surging demand in the wake of the pandemic, according to a new report from the Financial Times.

According to the FT, Peloton received a series of bikes from its supplier in Taiwan that had issues with corrosion. The company launched "Project Tinman" in response, the FT wrote, to guide warehouse workers on how to spot and remove rust, and define what level of rusting was acceptable to send to the customer.

While many bikes were fixed, seven employees from three different states said that "plenty of bikes" rusting on the inside were knowingly sent to customers to keep up with "unrealistic" quotas, the paper wrote.

The FT report shines further light on internal developments at Peloton, which saw demand for its equipment soar during the pandemic, only for orders to overwhelm the company before slowing as lockdown restrictions were eased. The company last week announced that CEO John Foley would stand down and the company would axe 20% of its workforce as it seeks to recover.

Commenting on the FT's report, a spokesperson for Peloton told Insider that the company first discovered the issue of rusting on the inner tubes of some bike parts in September 2021 at one of its operations facilities in Cologne, Germany.

After further investigation, it found that around 6,000 bikes already in distribution had been affected.

"Our internal testing, based on industry standards, confirmed the cosmetic oxidation issue would have no impact on a Bike's performance, quality, durability, reliability," the spokesperson said.

"We have not found evidence or received Member complaints that this specific issue has presented a problem. If we become aware that this specific issue has caused a problem in any Bike, we will work with the Member to resolve it, including replacing the Bike," they said.

One warehouse supervisor told the FT that management responded to the corrosion issue by sending hundreds of gallons of rust sealant to one warehouse.

"We didn't even go through a five-gallon bucket," the supervisor said. "They would spend insane amounts of money on things we would never use."

Peloton's struggle to keep up with soaring demand during the pandemic, as well as the subsequent delays and order cancellations, has been widely-reported. The company also faced other challenges with broken equipment, such as pedals that snapped off mid-ride.

Some of these problems persist. Earlier this month, Insider reported that customers are still having issues with delayed orders and cancellations, often through the company's delivery partner, XPO Logistics. A spokesperson for Peloton told Insider that the company hasn't seen a "marked increase" in complaints about deliveries in recent weeks.