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Foursquare’s CEO says Yelp is shaking down local businesses

75 points| stunod | 9 years ago |recode.net | reply

61 comments

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[+] sean_patel|9 years ago|reply
This is nothing new. Kathleen Richards, an investigative reporter with the East Bay Express, reported on this at length back in 2009.

See "Yelp and the Business of Extortion 2.0" => ( 2009 ) http://www.eastbayexpress.com/oakland/yelp-and-the-business-...

EDIT 2: Mobile view (1st page only) if browsing from iPhones, Droids... https://web.archive.org/web/20160709054149/http://m.eastbaye...

I remember being alarmed that time when I read this. So I asked a local Indian Restaurant owner located on 2nd Street and Market Street here in San Francisco, with who I had become good friends with, since he was from the same city as my dad (Bombay).

The restaurant used to be called "Bhindi". The owner pretty much confirmed everything in that report. He even told me that the Yelp Marketing guy threatened to display his low star ratings on top and completely hide true 5-star ratings if they (the restaurant) did not buy at-least 300$ worth of ads from Yelp every month. Eventually that restaurant went out of business (don't think it was related to the Yelp Extortion 2.0 though, definitely didn't help either) and now there's Mehfil in it's place.

EDIT: Her follow up story: "Yelp Extortion Allegations Stack Up" https://web.archive.org/web/20090616170118/http://www.eastba...

[+] tinbad|9 years ago|reply
I know that place! It's been the same restaurant but with different names for, what feels like, every few months from 2011 until about 2013 when I moved out of the city.

I first thought it was a front for something shady, but now it makes sense to why they kept changing their name so often!

[+] tomjakubowski|9 years ago|reply
Unfortunately the link to that story is entering a redirect loop on my iPhone.

Does anyone have a link to that story which works on an iPhone?

[+] beamatronic|9 years ago|reply
Are there any recordings of such calls?
[+] askafriend|9 years ago|reply
Here's Yelp's CEO's response on Twitter: https://twitter.com/jeremys/status/793159598651736065

Quite unprofessional in my opinion. Could have exercised a bit more restraint as a public company CEO.

EDIT: Here's a screenshot in case it gets deleted --> http://imgur.com/a/ViqX8

[+] kilroy123|9 years ago|reply
Wow very unprofessional indeed. Makes me glad I don't use their service very often.
[+] Cyclone_|9 years ago|reply
LOL Stoppelman's response sounds like something you'd hear from Trump - at the very least it's his platform of choice (twitter).
[+] clydethefrog|9 years ago|reply
The term bahramdipity comes to mind...

bahramdipity - the suppression of a discovery, sometimes a serendipitous discovery, by the often-egomaniacal act of a more powerful individual who does cruelly punish, not merely disdain, a person (or persons) of lesser power and little renown who demonstrates sagacity, perspicacity, and truthfulness.

http://www.the-scientist.com/?articles.view/articleNo/19271/...

[+] no_wave|9 years ago|reply
What was the Foursquare CEO exercising when he made unsubstantiated allegations against Yelp?
[+] Keyframe|9 years ago|reply
It's interesting to see how, over the years, service industry like that became dependant on user reviews on certain sites. About a week ago I was in a five-star hotel in Dubrovnik (Villa Dubrovnik, I absolutely recommend if anyone cares) that's had over 90 million Euros put into its new decor and stuff. That's some serious money. Yet, one of the first things guy told me there they are proud of their tripadvisor rating and, of all the things and ratings they have, that's probably the most important one to them.

These multi-national big corps have their nuts in hands of sites like these. Lots of potential for abuse, among great stuff for users of course.

[+] toomuchtodo|9 years ago|reply
I rely on Tripadvisor reviews exclusively when I travel, they've been spot on, and I've never heard of Tripadvisor being accused of abusing the system like Yelp. If they were to abuse service providers like Yelp does, I'd drop them in a hot second.
[+] dba7dba|9 years ago|reply
I heard rumors that Google tried to shake down tripadvisor when google tried to enter the hotel review business few years ago.
[+] post_break|9 years ago|reply
Here is a great example of how Yelp tries to bully small businesses: https://www.youtube.com/watch?v=C67Lh4LE5LY I suggest you watch this even if you like Yelp. It was definitely eye opening.
[+] rhapsodic|9 years ago|reply
Eye opening indeed. On a lighter note, I recommend the South Park episode "You're Not Yelping" (S19e04). The full episode is on Youtube (at the moment) and http://southpark.cc.com/ . It has plenty of the usual South Park toilet humor, but it's a brilliant take on the whole Yelp phenomenon.
[+] Touche|9 years ago|reply
That guy is super long-winded.
[+] tinbad|9 years ago|reply
Doesn't surprise me at all. I have stopped using Yelp for recommendations and went back to asking locals whenever I'm traveling. Not only is their search algorithm terrible (seems completely arbitrary to how or why places do/don't show up), the reviews and ratings seem to be a completely random and often times unreliable.

Part of the issue is that it's an oversimplified rating that doesn't allow for refinement. I can't recall how many times I see a place that has really good food only getting 3 stars because people don't like "the ambience" or the "service is slow" - two things that I, for example, don't care about as much.

[+] nradov|9 years ago|reply
We were in Vienna recently and wanted to find a good café to eat dessert. So of course I pulled out my phone and started searching for reviews. My wife just walked over to a fat policeman and asked him for a recommendation. Her technique seems to work pretty well.
[+] thomasdub|9 years ago|reply
I'd love someone to point to evidence of this beyond pure anecdotes. Yelp clearly allows negative reviews on accounts which advertise with them which can be seen with this Google search [0]. Furthermore an independent Harvard Business School study showed no evidence of fraud [1]. Sure Yelp gives a hard sell, but until some disgruntled ex-employee blows the whistle, or multiple businesses record evidence of this extortion, I'm not ready to believe this is any widespread fraud. I'm sure there are isolated cases, but surely someone would have come forward to back up claims that Yelp can manipulate reviews and ratings? [0] https://encrypted.google.com/search?q=site%3Ayelp.com+%22thi... [1] https://www.yelpblog.com/wp-content/uploads/2013/12/hbs-stud...
[+] ryuker16|9 years ago|reply
Anecdotal but I did reputation cleanup for a company. I never recalled any 'we'll remove low star reviews' offers from the Yelp sales team. My guess is some sales guys get desperate and the Yelp ad package was not cheap/scaleable like Google ads so they definitely had to dig.

Incidentally removing low star reviews from some sites is easy(prove review violates TOS) .... I remember Yelp being strict on not doing so.

If you want to see some real grade A con games....look up Groupon. Great idea, greedy as hell execution.

[+] tunap|9 years ago|reply
They claim ignorance of how their algo works, under oath in courts of law. The lawsuits and settlements have been mounting since 2010, AFAIK. Google yelp+lawsuit+algo.
[+] troncheadle|9 years ago|reply
I've moved twice in the past four years and I have gone to yelp for food recommendations a few times -- totally useless, sadly. Always wants me to go to Papa Johns or some other chain. The days of interesting food discovery via yelp are over. Oh how the mighty have fallen.
[+] beamatronic|9 years ago|reply
I don't know if anyone remembers the old days of Yelp ( talking 2006-2007-ish ). It was a fun community to be a part of. As a reviewer you had a great feeling like you were appreciated. There were community organizers setting up get-togethers at bars, sending swag to you in the mail, and earning stars and badges. It's really too bad they threw that all away.
[+] hsod|9 years ago|reply
I use Yelp all the time when I'm in a part of the city I don't know well. I mostly ignore the star rating and just look at the pictures and skim individual reviews for relevant info. Works great for that purpose.
[+] kirykl|9 years ago|reply
Waitress friend told me about her restaurant's zero tolerance Yelp policy.

If you are explicitly named in two negative reviews (in some un-defined time period), you are fired.

[+] jonwachob91|9 years ago|reply
Your waitress friend should submit a few (fake) bad reviews explicitly naming her boss (or whomever wrote the policy). Not to get the person fired, but to make them face the reality of that shitty policy and get it changed...
[+] jessaustin|9 years ago|reply
Wow I guess she wouldn't want to piss off any coworkers either, since fake reviews are so common.
[+] DanBC|9 years ago|reply
Holy shit talk about perverse incentives. Giving away free food avoids negative yelp reviews.
[+] oldmanjay|9 years ago|reply
That seems more like one tolerance.
[+] unclebucknasty|9 years ago|reply
>Unlike Yelp — they have several thousand people who dial the pizzeria and the bar to try and get them to pay each month. Our ratings are really neutral.

WTH kind of punctuation is that?

[+] TheDrizzle43|9 years ago|reply
Are you referring to the em-dash?
[+] gxs|9 years ago|reply
I'm not a huge yelp fan. I think there are elements of their product that are done sloppily, and I even dislike some yelpers that I've personally interacted with.

That said, it would be nice if someone presented some evidence to back up claims that yelp is doing something "corrupt".

I don't doubt their AE's are assholes, which is where I'm guessing a lot of business owners' negative feedback is coming from, but there's never been actual data driven proof that yelp does something shady.

[+] Analemma_|9 years ago|reply
> That said, it would be nice if someone presented some evidence to back up claims that yelp is doing something "corrupt".

This is an extremely difficult standard to meet. A lot of the accusations against Yelp involve phone calls with their sales reps, which is not public data that can be aggregated and parsed. All we really have to go on are anecdotes.

Speaking personally, I've heard from two people I know who have small businesses- a wedding photographer in Seattle and a small restaurant in Concord, New Hampshire- who separately told me how they had good Yelp reviews, and then watched them get pushed down and bad reviews pushed to the top shortly after they declined to buy Yelp ads. These two people didn't even know each their and would have no way or reason to coordinate their tales, and they told me identical stories. I never use Yelp anymore, for this reason.

Anecdotes might not be scientific data, but if the circumstances are such that scientific data is impossible to obtain, they're better than nothing.

[+] geofft|9 years ago|reply
In an ideal world, employing people to regularly be assholes to small business to extract profit would itself be shady. I want my local ramen place to worry about making delicious ramen, not about how to placate the guy on the phone making threats, regardless of whether the threats are credible.
[+] rajacombinator|9 years ago|reply
Such a shame all these entrenched web monopolies are focused on squeezing out profits with salespeople instead of continuing to innovate.
[+] sidcool|9 years ago|reply
The billion dollar bully documentary is a good documentary on this.
[+] photonray|9 years ago|reply
What's a good alternative to Yelp (other than FS)?
[+] buckhx|9 years ago|reply
If you're in one of their cities (NYC,DC,LA and a few others look) into https://www.theinfatuation.com . It's curated instead of crowd sourced and definitely caters to a younger audience.
[+] askafriend|9 years ago|reply
Nextdoor just rolled out a recommendations feature. Give it a try!

FourSquare used to be good but I stopped using it a while ago. It might still be pretty decent.

[+] j-walker|9 years ago|reply
Posting to that city's sub-reddit (if there is one) ?
[+] pcardh0|9 years ago|reply

[deleted]

[+] sctb|9 years ago|reply
Please don't shoot drive-by political comments into threads like this, that's not what this site is for.