Should We Pass A Law To Stop Yelp From Harming Chain Restaurants?

from the the-internet-enables-niches dept

We keep hearing stories about how "the internet is killing music" or "the internet is killing newspapers," which inevitably seem to suggest that "something must be done," and often that "something" involves the government getting involved. Of course, if you look at the details, you realize that the internet isn't killing music or journalism at all. In many ways it's just changing both and enabling new means of creation, distribution, promotion and sales. But, people like to interpret the struggles of one part of an industry, and pretend that represents the wider industry -- and then insist something must be done.

But, of course, one part of an industry becoming obsolete due to technology and market changes is the natural path of disruption, and not a cause for concern. Just to highlight this point, it's worth pointing to a Washington Post article with the title, How Yelp is killing chain restaurants. It refers to a study (pdf) that looked into the impact of Yelp reviews on restaurants. Among its many findings was that the market share of big chain restaurants appears to have declined.

When you think about it, this is not surprising at all. Part of the reason why chains are successful is because they offer familiarity, which allows potential diners to trust that the food they'll get at them will be of a certain quality. If you're unsure where to go, and want to minimize the risk, you are more likely to just hit up a big brand you're familiar with. But Yelp changes the equation. Now you can get an approximation of trust in a restaurant you've never heard of. It's not perfect, but it certainly decreases the risk, and thus increases the likelihood that you'll try a smaller alternative. At the same time, there's little that Yelp is likely to do to increase the attractiveness of a chain restaurant.

Of course, there's a wider parallel to other industries as well. We've heard some fears that the internet creates too many "winner takes all" situations, with a single dominant player, but the reality often seems quite different. It creates the ability to build a multitude of niches, because information decreases the risk of trying someone new or different. So rather than relying on a major record label to spoon-feed you the next big hit, you can find more niche music that you like. Rather than relying on the mainstream press for your news coverage, you can seek out alternative viewpoints. The rise of the internet and the ability to share information means that things are less likely to consolidate into single large players, because the reasons for such large entities often is undermined by more widespread information.


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    Anonymous Coward, Oct 12th, 2011 @ 6:08am

    Home cooking is killing the chain restaurants. Oh well. At least the obesity rate will decline.

     

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    Gabriel Tane (profile), Oct 12th, 2011 @ 6:17am

    who's fault?

    Did I miss something? Is it a review of bad service that ruined my reputation... or the actual bad service that generated the review?

    Is this just another example of shifting the blame and shirking responsibility?

     

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      Killercool (profile), Oct 12th, 2011 @ 6:44am

      Re: who's fault?

      It's like this...
      Entrepreneur A's business has always been subpar. But they never had to deal with any publicity stronger than pure word-of-mouth. They could depend on a small, but significant, stream of first-time customers. Most of these will never return. With a popular service like Yelp, their revenue from first-timers will shrink. That can be directly attributed to Yelp('s users?) convincing people they (the restaurant) ain't worth your time. Of course, the bad reviews were directly caused by bad service, but if Yelp didn't exist, the customers wouldn't have anywhere public to complain. So it's Yelp's fault.
      No, really. It is. Didn't you read my post? It's logical. If it's logical, it must be correct.
      Plus, you're being very mean, trying to suggest that I should spend money trying to please my customers, when ANYONE can tell it's those dirty pir- *ahem* yuppies making my business fail.

       

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    Killer_Tofu (profile), Oct 12th, 2011 @ 6:19am

    The Gutter

    It creates the ability to build a multitude of niches, because information decreases the risk of trying someone new or different.

    Am I the only person who's brain stopped at that line and thought for a second Mike was talking about entertaining politicians? I had to start the paragraph over to get the full context.

     

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    Glenn t, Oct 12th, 2011 @ 6:46am

    Yelp filter

    ANNOUNCEMENT: 

    We have recently implemented a system to outsmart yelp from hiding our filtered reviews:

    Step 1- first of all, if you’re advertising with yelp, we suggest that you stop doing so and shift that money to optimize your own web site instead

    Step 2- Have a graphic designer make a yelp badge that is placed on your web site. It should say “we have …… filtered and unfiltered reviews on yelp”. 

    Step 3- when a visitor clicks on the badge, it will go to another page ON YOUR OWN WEB SITE (instead of going to yelp’s. (why help them get traffic and rank higher anyways)? 

    Step 4- On this page have your graphic designer get a screen capture (picture) of all your filtered and unfiltered reviews and have them pasted together onto one page.

    Now, all your reviews (filtered or not) will be visible to all your web site visitors. 

    5- put a note on the top that says, “for your convenience we have placed all our filtered and unfiltered reviews on one page to see. If you’d like to go to our live yelp page, click here …………”

    Make the whole page clickable to your live yelp page  so no-one will think you’re trying to hide something or trying to be dishonest 

    Advantages of doing this: 

    1- Your visitors will stay on your web site instead of being directed to yelp’s

    2- Your  visitor can’t click on your competitors 

    3- No more being a slave to yelp’s algorithm

    4- Yelp would not benefit from getting traffic from you and higher rankings on google 

    5- This project cost us less than $150 to implement 

    Just be sure to shift that $300 per month on yelp advertising and put it into KEYWORDS that people will search for. 

    Please pass this along 

     

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      MrWilson, Oct 12th, 2011 @ 6:58am

      Re: Yelp filter

      Or you could invest that 300 dollars in improving your service so that your reviews are good on Yelp since many people find restaurants nearby using Yelp and may never see your website.

       

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        chris (profile), Oct 12th, 2011 @ 7:10am

        Re: Re: Yelp filter

        Or you could invest that 300 dollars in improving your service so that your reviews are good on Yelp

        that sounds like actual work. i'd rather not do anything of value but still get paid as if i did.

        people like you make me sick.

         

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          Hephaestus (profile), Oct 12th, 2011 @ 8:56am

          Re: Re: Re: Yelp filter

          "i'd rather not do anything of value but still get paid as if i did."

          Slowly step away from the keyboard, I am calling for an intervention, the random trolls around here seem to have rubbed off on you ... ;)

           

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            chris (profile), Oct 12th, 2011 @ 9:32am

            Re: Re: Re: Re: Yelp filter



            around here the difference between deadpan sarcasm and trolling is often hard to detect.

             

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              aguywhoneedstenbucks (profile), Oct 12th, 2011 @ 9:37am

              Re: Re: Re: Re: Re: Yelp filter

              Agreed. That's what makes it so fun. Some days the difference between the trolls, the shills, and the jokesters are almost nil.

              The worst part is that the jokesters usually try to be a parody of the biggest trolls. Many, myself included, have found that is almost impossible without explaining the joke.

               

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        Glenn t, Oct 12th, 2011 @ 8:17am

        Re: Re: Yelp filter

        We actually have a 5-star rating on yelp so I posted my suggestions as not to take revenge on yelp but to help others who we feel are being wronged :)

         

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      BigKeithO (profile), Oct 12th, 2011 @ 9:32am

      Re: Yelp filter

       

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    FHuminski (profile), Oct 12th, 2011 @ 6:54am

    The dark side of this, however, is that competitors can and do post bad reviews in order to drive customers away from any given restaurant. Plus, Yelp is allegedly trying to extort money from business owners in exchange for deleting (or at least not highlighting) negative reviews (see http://techcrunch.com/2010/02/24/yelp-class-action-lawsuit/ - yeah, it's TechCrunch, so take it with a shaker of salt). Another venue that is having problems with Yelp burying positive reviews is the Pittsburgh Scarehouse (which I learned about from here http://www.onezumiverse.com/2011/09/2011-review-pittsburghs-scarehouse-has-been-maligned-by-yelp-com / )

    I'm fairly sure that legislation is not the answer, but one wishes that there was some way for people to be held accountable for their actions...

     

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    out_of_the_blue, Oct 12th, 2011 @ 6:57am

    Mainstream news consistently wrong was and is USEFUL.

    Just listen and then believe the opposite. More sources DO mean more effort is rquired to evaluate "facts" and more risk as every yahoo puts out an "opinion", possibly paid to.

    Double-edge sword as always.

     

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      The Groove Tiger (profile), Oct 12th, 2011 @ 7:36am

      Re: Mainstream news consistently wrong was and is USEFUL.

      I see, you're saying that only Rich college boys and big Corporations should be allowed to put out an opinion, and not the unwashed yahoos.

       

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        Anonymous Coward, Oct 12th, 2011 @ 8:23am

        Re: Re: Mainstream news consistently wrong was and is USEFUL.

        Yelp is a joke. It's mocked on an hourly basis.

        If wherever you live isn't covered by Zagats then I suggest you move.

         

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          MrWilson, Oct 12th, 2011 @ 9:49am

          Re: Re: Re: Mainstream news consistently wrong was and is USEFUL.

          I am relieved to know you will never being moving into my neighborhood.

          But wait, Google just acquired Zagat. This will make it soooo pedestrian. Fancy foodies will have to go to new hipsteresquely obscure lengths to find a more elitist restaurant review site!

           

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          MrWilson, Oct 12th, 2011 @ 9:52am

          Re: Re: Re: Mainstream news consistently wrong was and is USEFUL.

          Also, welcome to the internet. Everything here is mocked on an hourly basis.

           

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    fogbugzd (profile), Oct 12th, 2011 @ 7:04am

    >>I'm fairly sure that legislation is not the answer, but one wishes that there was some way for people to be held accountable for their actions...

    How very, very un-American of you! Do you realize that that if we started holding everyone accountable every Wall Street banker would be unemployed and Washington DC would have to be vacated? Can you just imagine if corporate executives had bonuses that were actually based on performance? The horror!

     

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    MrWilson, Oct 12th, 2011 @ 7:16am

    Why don't these companies just propose a law that states that any company that existed before the world wide web can get whatever it wants if dealing with the internet? Isn't that what these legacy companies really want? They should just come out and admit it so we can mock them more directly for their failure to realize that times change and they need to adapt.

     

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    gorehound (profile), Oct 12th, 2011 @ 7:21am

    I am not using YELP so never looked there.I will say that the Internet is hurting many local economies as the shoppers are moving to buy online and that is hurting retail small stores.I lost my job of 18 years in July.There are practically no retail jobs in Portland, ME.Really sucks for me at 55 years old.And it sucks for all other folks who did work in Retail Stores or who did try and build a small business.And it does suck for the decreased tax revenues of local government.
    The Internet is not cool when it is a giant virtual Mall.I like the older Internet much better and am not liking these times one bit.
    And for those who did go to college for 4 years in Computers I have seen a lot of $10 - $12 per hour jobs so I bet it would take many years to pay off an estimated $30 grand to go to a college.Think I will attempt this when I turn 56 in just a few months so I can work another decade or so and then retire with a nice big bill to pay off with my SSI Checks ?
    I am so screwed and so are a lot of you who went thru a tech school and are now hitting the pavement trying to find a decent job.

     

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      Chris Rhodes (profile), Oct 12th, 2011 @ 7:37am

      Re:

      Yeah, I hate progress too.

      Used to be everyone had to slave in the hot sun for fourteen hours a day just to scrape by with enough food to live on. Now all those jobs are gone! They were stolen by fancy tech-nol-o-gie!

      The world would be a much better place if we could all just stop from being so damn efficient and productive!

       

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      Boost (profile), Oct 12th, 2011 @ 8:13am

      Re:

      I really hate it when people expect me to feel sorry for them because they have failed to adapt.

       

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      btr1701 (profile), Oct 12th, 2011 @ 10:07am

      Re:

      > I lost my job of 18 years in July. There are
      > practically no retail jobs in Portland, ME.
      > Really sucks for me at 55 years old.And it
      > sucks for all other folks who did work in
      > Retail Stores or who did try and build a small
      > business.And it does suck for the decreased
      > tax revenues of local government.

      I sympathize with you and am truly sorry you lost your job, but you're essentially equivalent to a blacksmith at the turn of the century. Once the Model T came along, it sucked to be a horseshoe maker, too, but we didn't outlaw cars or hobble the new automobile industry to protect the jobs of the blacksmiths. We didn't pass laws protecting the steamship industry when planes were invented.

      New technologies disrupt old ways of doing things. It's the way of the world.

       

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      S, Oct 12th, 2011 @ 1:09pm

      Re:

      This is pointless complaining.

      The stores which are more appealing to use than sitting at home will thrive; the internet will kill the rest.

      There is something patently unwelcoming about going into a shop and knowing, just knowing, that the kid at the counter resents one's existence, or that the owner is only going to "let" one browse for so long before trying to rush one out door.

      It's annoying and demeaning to deal with huge passive-aggressive signs saying, "Smile! You're on camera!" or stores which insist every customer check their bags at the counter.

      It's beyond annoying to have obtrusive or pushy sales people shoving crap down one's throat; there's no adblock equivalent for in-store salesmen.

      The places I know of which have remained in business are unsurprising: they're practical, efficient, competitively priced, and treat their customers like honoured guests, instead of annoying sources of cash.

      Just remember, the second I think my money is more important than my patronage, I'm going to go online and buy whatever-it-is for 4% cheaper (shipping included) rather than deal with the kind of entitled fuckup who thinks that just because they own the store that they also own their customers.

       

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    napacab (profile), Oct 12th, 2011 @ 7:50am

    Feeling sorry for the poor big chains

    Yes there should be a law so the big chains can continue marginal quality and services. When customer complaints could be isolated they did well...wow it's really a shame that Yelp makes it possible to share experience bad or good. The solution seems obvious; improve quality, improve service. And if they are too dumb to understand that very fundamental idea then good riddance.

     

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    Anonymous Coward, Oct 12th, 2011 @ 7:57am

    I love it when fatboy computer nerds opine about music and art and actually believe they know what they're talking about.

    The only reason it was the jocks that beat you up in school Masnick is because the art people figured it was easier to let those guys do the dirty work.

     

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      harbingerofdoom (profile), Oct 12th, 2011 @ 8:51am

      Re:

      2/10
      the only reason i gave you any points was for the prhase "fatboy computer nerds opine".

       

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      MrWilson, Oct 12th, 2011 @ 10:00am

      Re:

      High school has been over for many of us for a long time. It's probably time you moved on too. I'm sorry your glory days are over, but you really need to accept it.

       

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      btr1701 (profile), Oct 12th, 2011 @ 10:10am

      Re:

      > I love it when fatboy computer nerds opine
      > about music and art

      It's been my experience that the average techno-nerd is thin, not fat. Not sure where you're getting your stereotypes.

       

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      DC, Oct 12th, 2011 @ 12:43pm

      WTF?

      Um ... the post is about restaurant reviews? So Mike is now not qualified to write about restaurant reviews?

      As an aside you should really explain why the hate, or see a therapist asap.

       

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    BdgBill (profile), Oct 12th, 2011 @ 8:00am

    You hit the nail right on the head...

    I travel 200 days a year for work. When i first started, I used to seek out small independent restaurants. For every great place I stumbled into, I had about 3 bad or overpriced meals. Eventaully I just decided that a guaranteed mediocre meal at Applebee's or Chili's was better than the chance of another really bad meal.

    Yelp changed all that. I have tried places that I never would have considered if I had just been driving by. My Yelp experiences have been overwhelmingly positive. I have eaten Thai food in just about every big city in America but the best Tom Yum soup i ever had was at a tiny little place in the unlikely town of Banning California.

    So....Yelp has certainly shifted my dollars away from chains and toward local establishments but it has nothing to do with negative reviews of the chains. My opinion of the chain places is based on the many meals I have eaten there.

     

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    P3T3R5ON (profile), Oct 12th, 2011 @ 8:03am

    number of things

    The economy is killing resteraunts, chain and specialized. People who used to eat at fancy places are now taking it down a notch to eating at TGIF or Applebee's. Those who used to eat out are now packing lunches and frequenting their favorite dinner's not nearly as much.

    Yes YELP is helping people decided on what is a good place to eat when people are unfamiliar with it. It is certainly not killing resteraunts... that is unless the establishment wishes to be killed and does poorly, continuously, then people will give bad reviews and business will drop and then no resteraunt.

    Good service and food will make a resteraunt, the opposite will not... before yelp, urbanspoon or whatever other tool we all use, resteraunts would die because of bad service and word of mouth.

     

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      btr1701 (profile), Oct 12th, 2011 @ 10:13am

      Re: number of things

      > The economy is killing resteraunts, chain
      > and specialized.

      You'd never know it where I live in Los Angeles. Every restaurant I go to is packed. Always have to wait for a table. For a shitty economy, people sure do still seem to have money to spend on dining out.

       

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    Anonymous Coward, Oct 12th, 2011 @ 8:09am

    btw, the idea that **yelp** affects the business of **chain restaurants** shows what an incredibly laughable buffoon you and the rest of your internet-obsessed friends are, wow.

    just wow.

    Cuz y'know, the people that go to chain restaurants are a picky bunch and definitely consult Yelp before taking that exit off the highway or making the choice between Ruby Tuesday or Red Robin.

    hahahahaha

     

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      Killercool (profile), Oct 12th, 2011 @ 8:36am

      Re:

      Yes, because we all know that people who eat at chain restaurants and people who eat at standalone restaurants are TWO COMPLETELY DIFFERENT GROUPS. Overlap does not exist. No one on the planet has ever decided to eat cheaply today, because money is a little tight, and it would ruin their week if they gambled $35 on a joint, and it sucked. Especially since that $35 can no longer be spent eating chain food for a few days, as opposed to a single meal.

       

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      Killercool (profile), Oct 12th, 2011 @ 8:40am

      Re:

      Also, Pabst Blue Ribbon sucks. That is all.

       

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      Anonymous, Oct 12th, 2011 @ 12:32pm

      I have a group of (now former) coworkers that used to eat at Del Taco every Tuesday as our team lunch day. Other days people would bring lunches or eat randomly or whatever. Don't know why it was Del, just a bunch of young guys, not too picky and it was a "tradition" before most of us worked there. Somewhere along the line we started Yelping and trying a new local place every week and that meant one Del location was out 6-10 customers every Tuesday. Not a huge dent in their business I'm sure, and my story is an anecdote, but that actually happened and it's no better informed than your (what passed for an) opinion. Additionally, the article linked provides a link to the research paper studying the effect of Yelp on chain restaurants so you can feel free to read it and create some sort of actual counter-argument.

       

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      DC, Oct 12th, 2011 @ 12:47pm

      Re:

      Wow, again with the reading fail.

      That was the Washington Post saying YELP was killing chains.

       

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    Anonymous Coward, Oct 12th, 2011 @ 8:20am

    Clearly the government MUST get involved.

    I mean, Darden restaurants is Too Big to Fail. Just think of all the Seafood Chefs that will be out of work when Red Lobster falls to small, locally owned and locally sourced restaurants owned by money grubbing entrepreneurs run them out of business with their Yelp cult members.

    I propose filtering done by the Ministry of Truth, who should have an unlimited budget and be lead by the Legacy Industry Czar. Just because the world changes, why should an industry change to meet the changing landscape?

     

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    Steve R. (profile), Oct 12th, 2011 @ 8:49am

    There Ought to be A Law

    While each article may deal with a specific issue, I think that Mike may have overlooked a bigger issue -> consumer activism.

    Companies routinely form "associations", hire lobbyists, and employee public relation firms to promote a glowing images and to entice consumers to buy.

    The problem of course, is that when the consumer gets ripped-off, how do they fight back? The internet provides one such opportunity.

    Unfortunately, as noted by various TechDirt posts, companies seek to squash bad publicity. Companies even seem to believe that it would be appropriate for them to "buy" such laws from our politicians.

    Given that mentality, so much for the free-market and freedom of speech.

     

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    DannyB (profile), Oct 12th, 2011 @ 10:54am

    Consumer Reports should be outlawed!

    Consumer Reports has the ability to print a bad review about a product that causes people to stop buying it.

    This is bad for two reasons -- unrelated to the evil Internet.

    First I would point out how this is bad for the economy. If people don't buy that bad product, then they won't soon be buying another better product to replace it.

    In times past vendors of shoddy products could depend on uninformed people buying their product. In fact, an entire business model could be created around selling shoddy products to uninformed people. Consumer Reports undermines this and is thus guilty of Felony Interference With a Business Model.

     

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    DC, Oct 12th, 2011 @ 12:58pm

    Exploring

    Just as an aside ... I'm one of the restaurant explorers in my office, and while I have had bad experiences, when I can steer everyone to a great new place, it grants a lot of office cred :-)

    Local places can far outstrip the quality and price of chains.

    Bahn Mi for 5$?

     

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    Glenn t, Oct 12th, 2011 @ 9:01pm

    Old-school Word of mouth and referrals from happy clients trumps yelp reviews any day.

     

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    chris, Oct 12th, 2011 @ 11:59pm

    market share of big chain restaurants appears to have declined

    Good.

     

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    Philly Bob (profile), Oct 13th, 2011 @ 10:21am

    Gulp?

    I was wondering why more people were showing up at my house for dinner!

     

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    Anonymous Coward, Oct 13th, 2011 @ 11:42am

    As far as the "winner-take-all" issue, it seems clear that it depends on what business you are in. If you sell something that can also be offered by a competitor in a centralized distant location, then you might be in real trouble. If you sell physical goods that can be sent by mail with ease, AND they are goods that most people can wait 3 days to get, you are in the wrong business. I rarely buy anything from a local business unless I need it fast - the last time I did, it was for a presentation. I needed a remote ASAP - it was $8 on Amazon, and $50 at office depot. I don't even like Amazon that much, but at those prices, COME ON! That is why I have limited my transactional business model and focus on services that most organizations need locally and also services they need FAST.

     

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    Wyatt Chambers, Feb 14th, 2012 @ 11:01am

    Yelp Filters

    I am tired of Yelp filtering my reviews. I am sending them a signed petition with the names and comments of 10,000 small business owners and Yelpers. Help join the fight, let's tell Yelp to unfilter those reviews! http://tinyurl.com/73jr8sx

     

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    A. Lewis, Jul 2nd, 2012 @ 9:52am

    Yelp.com

    They are also destroying small businesses everywhere and some psychos are using the site to make comments about the owners and their whereabouts. It's sick and is NOT free speech. This site needs to either edit or be taken down. My entire life savings has been taken away b/c of some hate minded locals who make up crap and post it AND Yelp.com demands that I not only post my personal photo and allow them to verify my phone number, but these idiots get to remain anonymous??? WTF?

     

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    Jeremy MacDonald, Sep 9th, 2012 @ 8:15pm

    YELP - HOW TO BECOME IMMUNE TO THEIR STUFF

    Check this out - unyelpme.com! - we found it and it's fantastic - it will instantly fix your Yelp review stress like it did ours. We got our own reviews site that also ACCEPTS reviews too.
    We did it all in a few minutes and never have to care again about Yelp ot any other review sites affecting our business.

    Just go to unyelpme.com and read the one page there and you'll understand in a few minutes.

    We think it's fabulous!

    Good luck all!

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    Shadi, Sep 20th, 2012 @ 11:06am

    Have you seen the pictures on Yelp's listing on Yelp? Just saw a few, pictures of employees you can tell they were hand picked, I don't think normal good people would want to work for Yelp! There is one picture of this "Yelps Rules" wrote in the sands! This alone shows the mind set of these inhuman people! They believe they have they are ruling our lives! They are aware of destroying lives and they are proud of it! Hoe creepy is that!

    People in over seas pull down dictators by putting their lives on the line, why can't we have an organized demonstration to bring light and attention to this?

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    Shadi, Sep 20th, 2012 @ 11:07am

    Have you seen the pictures on Yelp's listing on Yelp? Just saw a few, pictures of employees you can tell they were hand picked, I don't think normal good people would want to work for Yelp! There is one picture of this "Yelps Rules" wrote in the sands! This alone shows the mind set of these inhuman people! They believe they have they are ruling our lives! They are aware of destroying lives and they are proud of it! Hoe creepy is that!

    People in over seas pull down dictators by putting their lives on the line, why can't we have an organized demonstration to bring light and attention to this?

     

    reply to this | link to this | view in chronology ]


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