It is OK, but not recommended. I would cut holes in the plastic cup because it is way too easy to drown the roots.
But, when I propagate peperomia, I use the plastic bag method. I put my cuttings in an inch or two of lightly moist soil in a ziploc bag, or other clear sealed container, and place in a warm spot that does not get any direct light. I refresh the CO2 every week by blowing up the bag with my breath. Usually, I get good roots going in 1-2 weeks on every single cutting.