Full Disclosure- I have a love-hate relationship with Yelp.  The ability to instantly know whether or not a restaurant is good or not, with as many restaurants as there are out there, is almost invaluable.  Almost. In the same breath, spend more than 5 minutes actually reading the reviews and it won’t take long to find people who either just want to complain about something, have never eaten in a restaurant before, or just lack critical thinking skills.  But if incompetent reviews weren’t enough to cast doubts on Yelp’s rating system, some of the company’s own practices make the situation even murkier.  

Their latest scandal? Yelp and Grubhub are teaming up to charge restaurant owners for deliveries that never happened.  

(Another disclosure- I have a personal vendetta against Grubhub, but it has nothing to do with the company itself and everything to do with how at the last place that I worked at that did Grubhub, the drivers were always so late that by the time they got there the food was cold and the customers would complain.)

The process starts when a consumer taps on a restaurant’s phone number within the app to make a call.  Except the phone number listed isn’t the restaurant’s actual number, but an entirely new number created by Grubhub.  The new numbers still redirect to the restaurant’s real number, but is set up to treat every call as if it’s an order, and charges the restaurant owner as such, even if the call is to make a reservation or just to ask a question.  Apparently this is all in GrubHub’s fine print, and with Yelp’s new Grubhub integration, Yelp can also get a cut of the money.  

This behavior isn’t exactly new.  

It’s no secret that Yelp allows companies to inflate their rating by paying to be at the top of search results.  However, they also have a history of attempting to extort companies into paying up to remove negative reviews, with some reports as early as 2009.  The aim is to force smaller businesses, who more often than not are dependent on Yelp reviews to spread the word about their business, to invest in their $200/month advertising packages in exchange for filtering out some negative reviews.  Some business owners have even claimed that they have contacted users who have written particularly scathing reviews, only for the user to say they’ve never even heard of their business, implying that Yelp may also be writing negative reviews themselves.  However, there isn’t much hard evidence backing these claims, so that may be written off as a Neil Breen-level conspiracy theory 

I’m about to uncover all the conspiracies.

Regardless, countless people have tried to take legal action against Yelp, and all have failed.  Most interestingly, even Yelp’s own shareholders questioned the authenticity of many of the site’s reviews, with the judge throwing out the case saying that it should be obvious that out of the tens of million reviews, some are bound to be fake. 

I’m sure Yelp will argue that all of this is just part of the services rendered, and that they deserve to be paid somehow.  And, admittedly, Yelp is one of those websites that most consumers, myself included, don’t really put much thought into how exactly they make money when we use it.  

Despite all of this, I still have a hard time fully rescinding my earlier claim of Yelp’s services being almost invaluable.  91% of 18-34 year olds say they trust online reviews just as much as a personal recommendation, and as much as I hate to admit it, Yelp is still more convenient than talking to a person.  I just wish they could find a way to run their business while respecting restaurant owners that they depend on.  

2 thoughts on “The Dark Side of Yelp

  1. RJG says:

    Personally I wish there was some way to enforce a prerequisite number of real visits to a restaurant before someone is able to review. Though even just enforcing on a single real visit would cut down on fraud.

    Or, people give feedback every visit then are invited to write a “full-blown” review after X visits.

    I think getting feedback more often and attempting to quantify away bias would be valuable. Reviews seem to come mostly from a very positive or negative experience unless you’re a compulsive reviewer. Probably we miss a lot of “middle-of-the-road” data.

    Not sure how you’d incentivize consumer participation in this.

    This could be a software idea in the same vein as Tock – the idea being “improve-some-crappier-restaurant-software”.

    A while ago on the PATH train there was an ad campaign for “Slice”. This is supposed to be a less-greedy Grubhub for pizza places and accused Grubhub of taking huge fees. Like, 20% of the order total.

    Not sure if this is true or not but seems plausible.

    1. Riley Johnson says:

      Yelp could also try the Waze route of incentivizing user contributions, in the form of exclusive titles, avatars, or other meaningless cosmetics…. which now that I think of it might be the idea behind the whole “Yelp Elite” program….

      I vaguely remember one of the articles on Grubhub I glanced over claimed that they may take up to 40%. Probably not accurate at all, but it does make 20% seem pretty feasible in comparison.

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