top | item 20625232

Yelp Is Replacing Restaurants’ Phone Numbers So Grubhub Can Take a Cut

953 points| pulisse | 6 years ago |vice.com | reply

449 comments

order
[+] mabbo|6 years ago|reply
It feels as though much of tech has gone from helping people accomplish their goals efficiently to a business model of extracting rents while providing no or little value.

In this example, what benefit is GrubHub providing to anyone? The person used Yelp solely to look up the phone number of a restaurant. GrubHub deserves 15% of his order for that? Why, because they made a deal to give X% of it to Yelp, and convinced the restaurant this was a good deal?

What value did they provide here?

Meanwgile, Yelp used to be a resource to find good businesses. Now it's... Something else. It's leveraging it's market power to make money rather providing customers with any value.

I don't know what the answer is but it feels like society needs to come up with a new word, new idea, (or probably an old one we've forgotten) and make it both an ethically bad thing and then also an illegal one (or at least one that is taxed higher).

[+] tempestn|6 years ago|reply
"Something else" indeed. Recently a scam site popped up that copied the branding of our site, autotempest.com. (They registered autoStempest.com and copied our logos and such.) They claimed to be a dealership based in Texas, but were actually posting fake vehicles and having people wire them money (which they obviously kept).

One of the things these scammers did to appear legit was set up a Yelp page with a bunch of fake reviews. We informed Yelp, but they refused to remove the page, because they "believe that the public benefits from sharing their experiences with local businesses." Obviously that doesn't make any sense since the entire business is fictitious, not to mention trademark infringing, but that was their response. So I did the only thing I could—posted a 1-star review of the fake business, warning people about the scam. Yelp removed my review, with the explanation that I did not appear to be a customer of the business.

[+] Nasrudith|6 years ago|reply
I suspect it is a downside of the financialization - silicon valley has become more generic business than any technical sophistication or engineering drive.

It has become way more finance and marketing over time - if Google was "tech" (indexing algorithms) that evolved into more marketing (their advertising role) then social networks started fundamentally "half-marketing" by being social oriented as opposed to sophistication of number crunching. This isn't meant as a slight - some business domains are just fundamentally are more one than the other. But that still shapes the culture.

Symbolically Juicero and Raw Water merchants show the shift to the lack of vision and smarts in a drive for cash. This isn't new of course - pets.com wasn't that bright either technically nor in the business sense but they were at least trying to move retail onto the internet.

As for society - the term is rent seeking and ridding us of it entirely would be a major commitment and ironically unpopular.

Unfortunately Yelp does have some value if not concretely - their name and reputation. If you were to try to launch a "zelp" tommorow nobody would stop you but chances are nearly nobody would go there because nobody heard of it and there is no good user content.

It isn't quite classical rent-seeking as they are not enacting barriers and anyone could enter technically. The issue is size and how people use it. If the market share was split or anyone could enter the delivery market with no overhead their share would shrink.

It is a side effect of consumer useage - there is a strong winner takes most tendency with the resulting network effect in spite of the fact the barrier to entry being so low and people going with the path of least resistance.

[+] floatrock|6 years ago|reply
> It's leveraging it's market power to make money rather providing customers with any value... feels like society needs to come up with a new word, new idea

The term economists use is "rent seeking behavior". There's a more interesting data play here, but I'll get to that in a sec.

Now, ostensively the value is driving traffic and increasing number of customers.

What they're actually doing is the blitzscaling playbook: become the only channel people go to online when looking for restaurants (last 10 years) and now monetize the captured audience (next 10 years). Because as people have moved online, what else are you going to do? Take down your yelp page?

That's the pessimistic take.

The optimistic take is the data play here. It's confusing, because they said two opposing things:

> Grubhub says it retains these recordings and uploads them to the private page that restaurants use to manage their service so that restaurants can audit them and dispute any errors. Grubhub says it does not use the recordings for any other purpose.

vs.

> "There is a restaurant on the Upper East Side that serves sushi. We worked with them and we said that there's a trend for poke bowls. We suggested that they start adding some of these items to their menu,” Grubhub senior vice president Kevin Kearns said at the hearing. “They did this and within one month, they doubled their orders, and within three months they 7x’ed their orders to 1,600 orders a month..."

So the data play is aggregating what people are ordering and turning that into analytics. Now that 15% take isn't just the cost of online rent, but it's also your cost to get insight into what everyone around you is ordering.

That said, the next question is whether the indian restaurant around the corner is actually going to use grubhub analytics to optimize their menu by placing their matar paneer higher up because that's what's being ordered at similar indian places and grubhub's telling them they can improve conversions by 6.3%, but that's effectively what some engineer or PM at Grubhub thought up.

If that story is believable, then it's a more-than-just-rent-extraction narrative. It's still kinda shitty, but that's why you sell jeans and shovels, not become a gold miner.

[+] asdff|6 years ago|reply
To me, this is a sign of grubhub/insert copycat delivery service circling the drain, trying to extract whatever cash they can get before the inevitable. Anecdata, but among my peers people sort by delivery fee or try to game the system for a new user discount. Delivery fees can easily be $7 now which is like buying another entire portion at some restaurants.

Personally, I use grubhub a lot--as a menu to look at for when I call the restaurant directly with my pickup order.

[+] themagician|6 years ago|reply
> It feels as though much of tech has gone from helping people accomplish their goals efficiently to a business model of extracting rents while providing no or little value.

This isn't new. So much of what we consider "value" today is just information asymmetry. Hiding phone numbers, hiding true costs, stuffing data into a proprietary database with a service contract, hiding whoever the real manufacturer of something is… that is where the money is made.

The Internet was supposed to fix that, but instead of getting an "Internet" we got a series of private networks, loosely connected, with gatekeepers. You can visit different ones, but they don't' really talk to each other. You can add your own information, but it won't really get seen by anyone because everyone has been conditioned to go through one of the big gates.

We tried for a while, with things like open protocols and semantic web, but most people quickly realized there was a lot more money to be had creating walled gardens.

[+] dreamcompiler|6 years ago|reply
The "something else" is a protection racket. "Nice restaurant you got here. Be a shame if something happened to your high ratings."

Yelp should be prosecuted under RICO.

[+] mirrorlake|6 years ago|reply
Grubhub's value to me is that they send out surveys to most (or all?) customers who order from restaurants, so the star ratings are actually useful to me. A lower rating is a huge red flag when I'm checking out new places, at least. But is that worth 15%? Most definitely not.
[+] wutbrodo|6 years ago|reply
I've never been a fan of Yelp as either a service or a company, but the assumption that they used yelp to look up the phone number isn't warranted here. Yelp's whole value prop has always been reviews and discoverability, and you're just handwaving that away and claiming that the only relevant workflow here is googling a known restaurant after having made the decision to order and using Yelp's page simply to find the phone number.

That isn't to say that I don't think Yelp's behavior here is gross, but the broader picture you paint of pure middleman rent extraction with no value created, eg with:

> The person used Yelp solely to look up the phone number of a restaurant.

Is circular in that you assume your conclusion and then point to it as evidence.

[+] Aperocky|6 years ago|reply
I've never used Yelp and never really needed it. Google imo is a much more neutral service and not hard to use at all to find restaurants.
[+] SilasX|6 years ago|reply
>The person used Yelp solely to look up the phone number of a restaurant. GrubHub deserves 15% of his order for that?

Hah, that reminds me of what’s happening with the custom of tipping, where it’s expected for more and more places with less and less service:

https://news.ycombinator.com/item?id=18241477

[+] mikestew|6 years ago|reply
It feels as though much of tech has gone from helping people accomplish their goals efficiently to a business model of extracting rents while providing no or little value.

Down vote me to hell for the "+1", but man that struck me as profound, and I wanted you to know (no contact info in profile). If only briefly, I had a moment of clarity that put a finger on that yucky feeling I feel about the tech industry lately.

[+] dwd|6 years ago|reply
I think the bad actor here is as much Yelp as Grubhub in that they are using Grubhub's relationship and ability to charge a restaurant to monetise their own listings.

That's where this is unethical and possibly fraudulent when you look at there action as basically generating fake advertising clicks.

[+] lancesells|6 years ago|reply
I really wish there was a GrubHub competitor that charged a monthly fee instead of the model of paying more the more successful you are. Restaurants pay x per month with normal processing fees and that's it.
[+] malandrew|6 years ago|reply
> while providing no or little value.

If there was no or little value, people wouldn't be using Yelp. Clearly there is value being provided, such as discovery, search and reviews. Now the quality of those three is debatable and changes from person to person, but to say they are providing no or little value is disingenuous.

This isn't about Grubhub at all. This is about Yelp. Grubhub is just the vendor to Yelp that is allowing Yelp another way to monetize its service.

[+] dymk|6 years ago|reply
If somebody is willing to pay the GrubHub fee, then they’re worth it. Really basic supply and demand, even if you personally don’t find the service useful.

Yelp is still my go-to as an index of nearby restaurants and bars.

[+] mikestew|6 years ago|reply
I've been in this industry 30-some years. I thought I'd seen the worst SV has to offer, but my jaw is just on the ground. I mean, I knew Yelp was constantly up to no good, but...just wow.

I suppose I should be furious at Yelp (or GrubHub, or...someone), but I'm really more furious at Apple for having not cut that partnership a long time ago. It just gets my goat every time I click an icon in Apple Maps, Yelp pops up, and there's no way to change data sources. And now this? I'm normally not one for a strongly-worded letter, but I might fire off some feedback on this one.

[+] m463|6 years ago|reply
Does anyone remember getting out the phonebook to dial a local tow truck?
[+] sundayedition|6 years ago|reply
I've found Google Maps review quality and quantity improved over the last few years so it's rare that I'd even open Yelp in recent months.

With this, I'm deleting my Yelp app.

[+] ortusdux|6 years ago|reply
The 7 years that google owned zagat correlated with a massive improvement in the quality of their reviews.

I have done the google maps local guide program a bit and the way it is structured is great. The google map slowly switches into proactive mode and solicits photos, ratings, and reviews.

A few months ago a friend asked me what I was up to, so I sent them a photo of 2 flights of beer in an attempt to get them to meet me at the bar. later, Maps asked if I liked the bar and wanted to upload the photo. For the last 2 months that photo has been the official picture of the bar and received over 250k views. Minimal input or interruption for me, large return for google.

[+] tfha|6 years ago|reply
Meh. I remember we used to use Yelp to find the best restaurants in a city. It worked incredibly well.

It doesn't anymore, but Google maps is not better. For example, I tried to use Google maps to find good buffalo wings in Brooklyn. But, the top suggestion didn't even have buffalo sauce on the menu! Just soy!

I tend to blame SEO first and ads / paid promotion second.

[+] ac29|6 years ago|reply
Google maps has definitely improved, but they are even worse than most review sites in the near worthlessness of their review scores. The vast majority of restaurants are rated between 4 and 5 stars, with the difference between a 4.1 and 4.6 being huge - the former being 50/50 that its good, the latter being the sort of place worth waiting in line for. The closest Michelin starred restaurant to me is rated 0.2 points higher than the forgettable greek restaurant across the parking lot from where I work, and less than 1 point better than taco bell.
[+] makerofspoons|6 years ago|reply
Their CEO was on NPR recently complaining about how Google Maps was eating their lunch and how it wasn't fair.
[+] duxup|6 years ago|reply
When I used to use Yelp, I found the reviews are so hard to wade though.

So many:

- I had a bad time .. once.

- This restaurant isn't as good as this other place that is twice as expensive.

- We had to wait a "long time".

- The food sucked (because they don't like the kind of food they serve...).

- This place sucks and you should go to this other completely different place.

[+] fma|6 years ago|reply
I like Google Reviews too and use it more than Yelp. Especially when Yelp forces me to download the app.

But I find it difficult to generate a link directly to Google reviews for a particular place... I can link to the Google maps results, but a review page by itself to read/write reviews would be nice.

[+] notyourday|6 years ago|reply
Yelp still has the best (as in the most comprehensive) reviews of restaurants. Google's reviews are littered with one sentence reviews which is rather unfortunate.

Having said that Yelp is absolutely, positively removes negative reviews from places that pay it for promoting. Having written a few and having opened tickets after those reviews disappeared I found the fun tricks they use to be able to claim that they don't censor reviews. They absolutely do. The only way to ensure that your review stays up is to post a copy of your check as a part of your review ( that's why you are seeing them these days ) which of course makes you totally identifiable and open to the lawsuits. Otherwise whoever "owns" the listing can dispute the review by claiming the person who left it is not sharing his or her personal experience.

[+] aarbor989|6 years ago|reply
When I was in physical therapy about a year ago they told me to leave reviews in Google rather than Yelp because research showed it was more effective. I found it hard to believe since my peers and I both used Yelp way more, but I find this recent behavior from Yelp abhorrent so it may be time to switch
[+] proverbialbunny|6 years ago|reply
Does google maps have a search by rating, open time, and so on?

I usually eat dinner around the time most restaurants have closed in the area. I find when I search google maps it gives me places closed, and often the hours in their listings are off. To be fair, hours have improved quite a bit in the last year.

I need a way to filter what I'm looking for.

[+] libria|6 years ago|reply
The Google alternative to Yelp is Local Guides: https://maps.google.com/localguides

You can earn points and level up for your contributions (reviews, photos), but they don't have anywhere near the incentive structure as Yelp yet.

[+] DantesKite|6 years ago|reply
I wonder sometimes if Google Maps does better than Yelp because it tracks where people actually eat, not where they say they eat.
[+] wil421|6 years ago|reply
Lately I’ve noticed Google Maps had better images. Not sure if they scrape some of them but they didn’t overlap with Yelp. Google Maps reviews also tend to be more positive.

The two bad things I noticed were fake guides and a few bogus sounding comments.

[+] futureastronaut|6 years ago|reply
Google Maps is also shoving Grubhub down our throats. Every time I try to call a restaurant's phone numer in the new Maps app, I end up accidentally opening a Grubhub tab in Chrome.
[+] Aeolun|6 years ago|reply
But Google Maps is owned by Google. You’re basically exchanging the devil for Hitler.

It’s an improvement, but still bad.

[+] kadabra9|6 years ago|reply
Yelp is such a slimy company.

First they wall off their mobile web reviews to try to force you to download their POS app, they have the whole extortion racket going trying to strongarm restaurants into paying for advertising, and now this.

Friendly reminder - if you are on mobile and trying to read a Yelp review and don't want to download their app, simply hold refresh, click "request desktop site" and it will load the full review without forcing you to get the app.

[+] MentallyRetired|6 years ago|reply
It's hard to make money as a directory service with Google and Apple Maps around. The shadier they get, the bigger of a sign it is that they're in trouble financially, I would think.
[+] habosa|6 years ago|reply
Yelp 5 years ago was a truly valuable service. You could go anywhere (in America) and find good food.

Then they lost focus. The app has not improved an ounce since then (seriously why is 'open now' not a default filter) and they've spent a lot of time doing shady things or complaining about other companies. They've tried to get into reservations, delivery, and non-food services but with half-assed attempts at each. They also did a really bad job at maintaining a healthy reviewer community (Google has done much better).

It's a shame because I don't think any other app took the lead here. Yelp just walked backwards into the pack.

[+] kevin_b_er|6 years ago|reply
Amazing. Yelp redirects the customer who intended to look up their number in Yelp, redirects them GrubHub. GrubHub then grifts the restaurant for it.

These online order companies are grifters. With tricks and sneaky fees, they exploit the restaurants, they exploit the customers, and if delivery is involved, they'll exploit the driver too.

[+] makecheck|6 years ago|reply
Funneling things through the app is just unhelpful on many levels.

The interface when clicking on a web page from Yelp is worse than using the browser directly; therefore, instead of tapping, I read the web address and just go type it out.

And don’t even get me started on E-mail/communication with businesses. Recently I tried contacting a contractor, and happened to start the request from a form in the Yelp app. Since the very first thing on the form was asking for my E-mail address, I logically assumed that I would receive an E-mail reply. Instead, nothing; after awhile, I assumed just needed to find somebody else. Then, days later (or whenever I wandered into the Yelp app again), and only after I just happened to tap on some stupid icon in the corner, I finally see a reply: in the app. That is utterly useless! In fact, all of these “E-mail look-alike” interfaces are useless: I don’t need your company to completely recreate your own in-box interface that will surely suck in some way, when you could have just allowed E-mail to be used. Heaven forbid I dare to communicate with someone without your knowledge. So, yet again, like with URLs, now I just dig up the web site manually, dig up a real E-mail address or phone number manually, and contact them manually.

[+] tjr225|6 years ago|reply
I had to install their app to get in line at a local restaurant. Immediately uninstalled.

I don't see why people use Yelp other than the fact that they have a mindshare dominance on ratings. User generated/internet 2.0 style food ratings are basically useless anyway, add in all of the other shady stuff Yelp does and you have a hard pass from me.

[+] oneepic|6 years ago|reply
Would any Yelpers here care to comment on the issue? I interviewed there in the past, and know friends that work there. When I asked what they thought about the "blackmail" rumors from a while back they just laughed it off, because they honestly thought they were just rumors. And they enjoyed their work, and their work-life balance, and all that. Sounded like a fun, positive place to work, if you ignored the headlines.

So there's a disconnect here. Is there a dark pattern and slimy business going on in Yelp, or is this simply a weird situation that got sensationalized by a news article? I'm hesitant to make any assumptions.

[+] troydavis|6 years ago|reply
Developers who have been asked to implement a UX dark pattern like this one (or Yelp’s decision to forcibly open the App Store without warning in https://news.ycombinator.com/item?id=20625852), did you implement it? Why or why not?

I can’t imagine a case where I would be skilled enough to obtain employment at Yelp, and thus at other companies too, and yet would agree to implement something particularly slimy instead of quitting.

Obviously some people make different decisions, though. If you worked at a well-known company when they implemented an intentionally deceptive darkpattern, perhaps others can learn from your experience.

[+] duxup|6 years ago|reply
Grubhub's process of creating fake websites that compete with the restaurant's official site so that they can take a cut of any direct orders is so scummy.

I refuse to have anything to do with either company. I care about my local restaurants, not slimy practices like that.

[+] Balgair|6 years ago|reply
>“I definitely implore people to forgo the three seconds of convenience to help neighborhood businesses,” he said.

Interesting way to end the article. I think we have all seen lines around the block for the new hotness in local resturants. If the owner is trying to get people in the door like this, then it is likely that these apps are not the culprit in the issues that the owner is facing.

In the article, grubhub points out a business that they helped out by pointing the business to switch to poke' bowls. There are some interesting points about that:

1) Per my reading, they only can point out one example. I did not see any stats or talk about a population, just an anecdote. I may have missed something though, or the writer decided to not use that sound bite.

2) That is consulting. They are mixing referral fees and trying to point out that they are sucessful un-solicited consultants too. This is not initially murky stuff, but it can get mixed up really fast. The incentives are not well aligned.

[+] blue11|6 years ago|reply
Streeteasy started employing the same dark pattern a few months ago. It seems like companies who have an effective monopoly just cannot resist the temptation.

They replaced the listing agent's number with a number that takes you to one of their agents. (After a while they added back the option to contact the actual listing agent, but you have to first click on a link to get to another page.) Also, as soon as I contact an agent about a listing their agents start spamming me with texts and emails written in a way that try to obscure that they are not the ones who have the listing. At this point I never contact an agent through the Streeteasy platform. I just google the agent's name to find their contact info.

[+] potench|6 years ago|reply
My favorite sushi-restaurant SugarFish was originally a take-away-sushi shop, the sushi is very high quality and somewhat inexpensive for the quality ($40 a meal). Also dine-in lines are consistently super long (they don’t take reservations), so I like to order pick-up / take-out. Except, now they force you to order take-out through Postmates which charges a large 15% fee and a flat service-charge (that I don’t recall but will update here when sugar fish opens). Sucks because I love the restaurant but really don’t appreciate paying Postmates fees when I’m picking it up myself. When you call in an order they auto-direct you to Postmates.
[+] dreamcompiler|6 years ago|reply
I think it's high time for a full-blown FTC investigation into Yelp for restraint of trade, consumer fraud, false advertising, and whatever else the FTC can think of. These parasites have outlived their usefulness.

Failing that, a high-profile class-action lawsuit might get their attention.

[+] leroy_masochist|6 years ago|reply
I'm no lawyer, but to my layman's eyes this has class action lawsuit written all over it. Would love to hear an actual tort attorney's perspective on this.
[+] myrandomcomment|6 years ago|reply
My local handyman (he is a real engineering, just does this after getting out of working a corporate job) that is booked months in advance told me a story. He was listed on Yelp with perfect reviews. One day Yelp called him and ask him about some paid for service to improve his listing. He said no thanks. A few days later he when from showing up in the top of the search to near the bottom. He is a great guy and does fantastic work. I was done with Yelp from that point.
[+] shkkmo|6 years ago|reply
> “There's a button where you could hit play and so I was like, what is this?” he said. “I hit play, and the first call was me on the phone, which freaked me out because I didn't know I was being recorded.”

So is grubhub providing a notification to the restaurant that they are being recorded in two party-consent states?

And is it possible to get on the grubhub platform without agreeing to pay the marketing commission for phonecalls?