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Over the last two years, I have increasingly used Yelp to help me make dining decisions. And  generally speaking, I've benefited from the experience and will be glad to credit them for helping me track down on of the best and cheapest Chinese restaurants in town. They also drew me back to a Jamaican food restaurant that I had written off under prior management. But a recent experience clued me in to one of the dirty little secrets behind Yelp's business model that many people are calling extortion. It literally and figuratively left a bad taste in my mouth and made me question whether Yelp can be trusted.
Yelp works by compiling crowd-sourced reviews in a number of ever-expanding areas. Its core has always been restaurants. Unlike Zagat or sites like Gayot.com, Yelp relies on the user submitted reviews and ratings to grade a restaurant. Theoretically, these users give honest feedback. But the reality can be very different. For instance, Yelp actually pays people, especially in new markets, to write reviews of restaurants. While this practice, in itself, won't necessarily create a biased review, it definitely flies in the face of the Yelp motto, "Real people. Real reviews." Combined with some of its other practices, Yelp has created a model ripe for abuse.
In a recent class-action lawsuit filed two weeks ago that was noted in the Wall Street Journal, other practices that undermine Yelp's credibility are laid out. If true, they are tactics that amount to straight out extortion. The scenario most identified goes something like this: a business gets a bad review which acts as a sales lead for the Yelp sales team. The salesperson calls the business and offers a package of $300 to $1,000 a month to move the negative reviews down and the positive reviews up or perhaps delete the negative reviews entirely. If the business agrees, they get the ability to showcase their favorite review at the top and pick and choose portions of reviews favorable to them. If they decline the advertising, according to plaintiffs, positive reviews disappear and the negative ones move to the top. In some cases, plaintiffs allege that numerous positive reviews were removed when they declined the proposed advertising package. To many, Yelp's business practices are nothing short of extortion. Pay Yelp and get good reviews. Fail to pay and see your business get pummeled in the ratings. Yelp naturally denies these claims.
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