Why does everyone hate Yelp?

Imagine, if you will, that you owned this newspaper. I know. Glamorous.

It’s not enough, however, to own the finest newspaper in the Eastern Sierra. Because you are a visionary. You want to literally create a new brand of 21st century journalism.

So you engage very talented software engineers and you develop an algorithm to measure the reliability of information presented.

Literally, when your reporters submit stories to you, you run those stories through the algorithm, which will then make determinations as to what extent those people quoted in the story are being truthful.

The algorithm is so good it will actually remove quotes from stories when it determines those quoted are lying.

Your software is then adopted, to great fanfare, as the industry standard. This creates a renaissance in journalism, which suddenly boasts newfound credibility. Millions of new readers flock to print journalism because, unlike so many other mediums, they KNOW that what they’re reading is the truth.

Likewise, money flows in as advertisers buy into the paradigm and you are more than happy to burnish the hype. Because not only is the truth good, but the truth sells.

But there’s just one little problem.

What happens if the software isn’t quite as effective as you say it is? What happens if your hype is misleading?

This is the quandary that the online review site Yelp finds itself in right now. And the reason we’re talking about it in Mammoth is because a Mammoth-based restaurateur whipped Yelp in court this summer. Jim Demetriades, owner of Sierra Nevada Resort (which operates three restaurants: Rafters, Jimmy’s Taverna, and Red Lantern), was granted an injunction by the Calfornia Court of Appeals. The injunction prevents “defendant Yelp, Inc. (Yelp), the operator of a popular online website that contains customer reviews of businesses, from making claims about the accuracy and efficacy of its ‘filter’ of unreliable or biased customer reviews.”

The California Supreme Court has since denied Yelp’s Petition for Review.

The backstory 

According to court documents, Demetriades instructed Jack Carter, then-manager of Rafters Restaurant, to obtain advertising on Yelp for Rafters in June, 2011.

“In purchasing advertising, plaintiff relied on Yelp’s statements concerning its filter,  but soon realized that Yelp’s representations … were not accurate.”

While Yelp promises in its advertising that “our engineers are working to make sure that whatever is up there is the most unbiased and accurate information you will be able to find about local businesses,” Demetriades says “It was pretty clear there was something unusual happening … I’d see a positive review read by a greater number of people buried on the third page of review results while a creative, more flowery attack on the restaurant appeared on the first page.”

“They intentionally keep the most salacious reviews,” adds Demetriades. “Yelp loves contentiousness.”

Court documents stated that of the 102 reviews Rafters received, 50 were filtered [out].”

Typically, Yelp filters out approximately 15 percent of a restaurant’s reviews.

Over the past few weeks, The Sheet has crunched Yelp review numbers regarding several restaurants, including those owned by Demetriades.

Even now, the number of reviews of Rafters filtered out by Yelp (107 out of 245, or 44 percent) is almost double that of any other restaurant in town.

A restaurant’s star rating is determined by the average of the accepted [unfiltered] reviews.

While Rafters currently has a three-star rating on Yelp, the 107 reviews rejected by the Yelp filter average 4.17 stars.

If these reviews were included in Rafters score, it would certainly improve its overall rating by at least a 1/2 star.

If you don’t think this matters, a recent study published by the Harvard Business Review found that the difference of one star in an online review rating may affect gross revenue by anywhere from 5 to 9 percent.

What Yelp also does poorly relates to its inability to reflect changing conditions. The Sheet found several instances where a restaurant’s rating was far below the average of the most recent scores it had received.

For example, Lakanuki has a current Yelp rating of 2.5 stars, but by date, the last 15 reviews average 3.8 stars. This could be because Owner Stu Need has not only overhauled his menu, but he also hired Chef Karl Dawson away from Lakefront Restaurant.

Nevertheless, Need’s rating is bogged down by reviews like this: “$10 cover? Eat me.”

How does a one-time nightclub cover charge not get filtered out of a restaurant review section?

“I don’t find Yelp to be a legitimate review site,” said Need. “We get knocked around because someone doesn’t want to pay a cover, or someone loses a coat. This has nothing to do with the food. One review complained about food poisoning, but based upon the timing, clearly that food poisoning didn’t occur at our restaurant. We just took the blame for it. And then it [the review] just sits on the site and you can’t take it down.”

“When you complain to Yelp, no rules apply except their own,” chimes in Demetriades. “They just tell you to pound sand.”

Another example of a restaurant whose recent improvement is not reflected by its rating. Campo: Yelp rating 3.0. Most recent 20 reviews average 3.55.

Among the restaurants most penalized by the Yelp filter is the Smokeyard, which has a Yelp rating of 3.5 stars. However, 75 reviews (or 23 percent of its total) filtered out and not factored into its score averaged 4.15 stars.

Petra’s: Yelp rating 4 stars. Filtered reviews average 4.43 stars.

John’s Pizza: Yelp rating 3.5 stars. Filtered reviews average 3.9 stars

Red Lantern: Yelp rating 3.5 stars. Filtered reviews average 4.2 stars.

Jimmy’s Taverna: Yelp rating 4 stars. Filtered reviews average 4.44 stars.

On the other side of the ledger, Angel’s Restaurant has a Yelp rating of 3.5 stars but the filtered reviews average just 2.6 stars.

Lakefront: Yelp rating 4 stars. Filtered reviews average 2.93 stars.

The Yelp mafia 

More than one local business owner said that people have threatened to write poor reviews of their businesses unless they are comped part or even all of a meal.

As Kerry Mechler at the Mammoth Tavern explained, “We got a one-star review the other day because … we don’t take reservations. We told the woman if she showed up at 6:45 or so, we could seat her party within 10 or 15 minutes. But she showed up, couldn’t be immediately seated, and then threatened to Yelp us on her way out. She would have been seated within the promised time if she’d stayed.”

“Yelp is for haters … at least a certain percentage,” said Mechler. “And honestly, good or bad Yelp reviews are not going to affect our business.”

Robbie Tani of Yamatani said that when one side dish was not delivered in a timely fashion, rather than accept the restaurant’s apology and a comp for that dish, the person wanted the whole meal for free … or threatened a negative review.

“Yelp elite users have absolutely made financial demands upon us,” said Demetriades. “Yelp has created a spoiled breed of clientele.”

Another restaurant owner, who preferred to remain anonymous, said he was the leading restaurant in his food category … until he declined to advertise with Yelp. “I had been getting two or three reviews a week. Suddenly, I stopped getting any reviews and then six or seven of my best five-star reviews just disappeared from the site,” he said.

Jen Venneman, former marketing manager at Convict Lake Resort, advised her superiors at the time to advertise on Yelp “so they could deal with their bad reviews.” Not that the Restaurant at Convict Lake has many bad reviews. She just figured it would be easier to address what poor reviews there were if advertising dollars were flowing in Yelp’s direction.

John Farber, who owns The Stove and Giovanni’s Pizzeria, said, “I used to check Yelp every day and fret about it. Now I check it maybe every few weeks. I try not to dwell on any particular review. Instead, I try to focus on patterns … we have fixed things because of it. It’s a love/hate relationship. It sucks, but it can be truthful.”

As Michael Ledesma, owner of Gomez’s and Base Camp Cafe, observed, “Trip Advisor is for grown-ups. Yelp is an adolescent way for people to vent. It caters to a younger audience and it doesn’t have any controls. Over and over, I feel Yelp reviews lack credibility.”

Ledesma and many of his peers (in fact, I didn’t speak to one person who preferred Yelp to Trip Advisor) believe Trip Advisor is better review site and is committed to doing actual fact-checking, particularly when it comes to the hospitality industry.

What happens next? 

As a result of his win at the Court of Appeals, Demetriades said, “We are the first company in history to be permitted to take Yelp to trial to contest the veracity of their filter.

“We can subpoena anything, and will have access to their source code and filtering software.

“We can also have access to internal emails … we can review all these things to assess whether there’s been impropriety.”

If there’s anyone to look at the tech side of this, it is Demetriades. His former company SeeBeyond (before it was sold to Oracle) was rated as the world’s #1 integration computer software company by the Gartner Group.

“There’s no question there’s liability,” he said. “They fought us. You don’t fight unless there’s something to hide.”

As more than 50 million businesses occupy a presence on Yelp according to ABC News, “the potential liability is gigantic,” said Demetriades.