Yelp to stop auto-creating fundraisers after outrage from business owners | Hacker News Reader

Yelp to stop auto-creating fundraisers after outrage from business owners

theverge.com

176 pointssmacktoward92 comments

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This article has a little more context: https://www.theverge.com/2020/3/26/21196446/yelp-gofundme-co...

Some stuff that was weird about this rollout, from the Verge article:

- opt-out process required sending a scan of your drivers license

- GoFundMe page added a suggested donation of 15% to GoFundMe

- Yelp showed fundraising links for international retail outlets like L'Occitane

Strikes me as something that would be great as an opt-in. As an opt-out, it's understandable that "I'll stop doing this if you send me your drivers license" didn't go over too well, particularly from a company that many small business owners understandably mistrust in the first place.

Ok, we've changed the URL to that from https://sf.eater.com/2020/3/27/21197236/yelp-dna-gofundme-wr.... Thanks!

I assume the DL was to prevent bob's pizza from cancelling joe's pizza's go fund me.

However the whole thing is despicable on Yelp's part. Then again despicable appears to be a core part Yelp's business plan.

"I assume the DL was to prevent bob's pizza from cancelling joe's pizza's go fund"

I assume they have a concept of "claimed sites". That statement implies they were doing this for sites/properties where they had no idea who owned it. Which makes it even more over the top stupid. That they are collecting funds for an entity which they only have very circumstantial evidence even exists. What a crazy arrogant culture that this idea made it through an approval process.

For example, my wife and I made a fake restaurant on FB out of our backyard for the 3 or 4 gatherings we have a year with friends and family. It ended up on Yelp, through no effort we undertook. It's just our backyard.

Seriously, how did they get around KYC (“Know Your Customer”) and AML ("Anti-Money Laundering") regulations? GoFundMe, as a MSB ("Money Service Business") is required by law to verify their customers' identitues (https://www.irs.gov/businesses/small-businesses-self-employe...). If Yelp did not provide this information, they both are violating MSB regulations.

Don’t know if gofundme is subject to those but yelp certainly wouldn’t be.

Any business that takes even 1 cent from someone and gives it to someone else is, by the definition provided on the url I shared above, a MSB. GoFundMe certainly is. Yelp is not, but they are culpable by this business business arrangement.

From your link on MSB "for an amount greater than $1,000 per person, per day, in one or more transactions." - so, no.

From my link "a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity." (emphasis mine)

So, YES. Did you just stop reading after your bias was confirmed?

How on earth is this legal? Yelp started fundraisers for restaurants, made a barrier for them to collect those fundraisers, and is presumably holding on to a ton of cash people thought was going to the restaurants? This feels like plain fraud.

The "brave" browser collects donations on behalf of arbitrary websites but we don't seem to be up in arms about that. (Although we should be.)

Brave holds the funds temporarily and returns them to the original user who donated after sometime.

Presumably GFM would need to do the same (or it would be blatant fraud). So that doesn't really make it different.

People were very much in arms about it when that story broke.

Funds are collected by GoFundMe through a partnership and the policies for claiming belong to GFM.

I pretty much guarantee you there's a back end contract between GFM and Yelp sharing some of the admin. Yelp isn't just doing it for free and allowing GFM to pick up money for free, especially with the "suggested 15% donation overhead".

Without having a clue about the situation and never having heard of it, "SF bar owner" and the colorful language made me pretty sure it was jwz, and I was not wrong. :)

For our newer viewers he's something of a character, and worked on a few important pieces of software before becoming a bar owner instead.

Also be sure not to link to his website directly from HN. The HN referrer will trigger somewhat... unexpected ...behavior.

Xscreensaver is great though.

To see how colorful, just follow the link to his website and let the referer header do its work: http://jwz.org

Lol. NSFW, perhaps? That is, theoretically, if anyone was "at" work right now.

He isn't wrong, though.

> and worked on a few important pieces of software before becoming a bar owner instead.

Fun documentary: https://www.youtube.com/watch?v=4Q7FTjhvZ7Y

Look at all those offices and spacious high-walled cubicles, productivity nirvana!

For those that don't know he is the proprietor of DNA Lounge/DNA Pizza.

They are going through a rough time atm with the lock down. If you are in SF and love DNA consider ordering a pizza and/or some cocktails or contributing to their Patreon to help the club get through the shutdown.

It's particularly funny given that he's been such a lousy bar owner that he has previously asked people to just donate money so they could stay open.

Wow, this is a massive oversight. What product manager thought this was a good idea without making it an opt-in? There isn't even an opt-out.

1) Owners who aren't active on Yelp may never notice this feature, and so the money is never claimed.

This is big, your customers think they are supporting you and instead they support Yelp.

2) Yelp may be taking a cut? But I can't find any evidence to substantiate this claim.

Even if they were not taking a cut, they can make interest earnings on the parked money.

Personally, I would not allow Yelp to do this on my behalf because I own the relationship with my customers, not Yelp.

Yelp is actually pretty bad. They replaced restaurant phone numbers with a GrubHub number without telling users so they can get a cut of any phone order.

https://www.vice.com/en_us/article/wjwebw/yelp-is-sneakily-r...

Oh I know. I am giving them the benefit of the doubt considering this is a crisis and even some monsters are looking humanitarian lately.

This was before the crisis

> Owners who aren't active on Yelp may never notice this feature, and so the money is never claimed.

That's likely the whole goal this thing was set up in the first place.

Several top-level commenters are questioning why the restaurant owners would be upset about this. Some reasons are listed in the Verge article:

1. It's causing unneeded additional stress to the business owners

2. It causes harm to their reputation

3. It was done without their consent

4. It's being done on a mass basis for [Yelp/GoFundMe's] benefit

5. The process to opt-out is arduous

It doesn't seem like a ridiculous request that you get the owner's consent before you involve them in some kind of business arrangement.

Beyond that, some people have been able to restructure their food business around take-out and are doing fine, don't need any kind of bail out and it looks absolutely shitty for them.

I know there's that whole "It's easier to ask forgiveness than permission", but seriously, there are limits to it.

So, what happens if a business owner never "claims" the GoFundMe? Does Yelp keep all the illicitly raised cash, or does GoFundMe, or do they split it?

Pretty sure a savvy DA could figure out how this is a criminal offense.

Maybe fraud? Yelp is posing as the owner in order to set up fund-raising without prior consent.

With any luck, they’ll pursue criminal charges and not let them off with a settlement.

Defaulting to opt-out, instead of opt-in, creates work for those, who'd like to have nothing to do with it.

It's only fair to make it opt-in, if you're then also getting compensated for it.

Somewhat reminiscent of that "we'll raise money for publishers and keep it for them too" thing Brave browser were doing until the internet blasted them for it...

it always surprised me that “good guy” Tim Apple is down with having a bag of hot garbage like yelp on their maps. Then again when the end game is for companies, not people, to benefit, this is the stupid shit we get to deal with.

Is there an alternative that provides a similar service?

I’m not sure why apple wont capitalize on their huge user base and allow map users to write their own reviews. It would be much better than being in bed with Yelp.

Because they would need to put together a moderator team, and then 2 years from now find some way to monetize it to justify the products existence to the bean counters. The suck at moderating reviews for products they already have reviews for (apps, podcasts, etc) why would they want to add another failure to that list?

I can't help but laugh everytime I see Tim Apple

The bar owner being jwz, Netscape hacker.

Yelp is one of those companies that seems to play low-ball and make bad product decisions (consistently over many years).

I guess it's just in their DNA.

Incredible for how people here fraud and misrepresentation need to be explained. Is it really that hard to see why this is just wrong?

Why does Yelp keep having these shady business practices ? Is it because their fundamental model is bad ? I actually like the product and to me it is indispensable if you are a tourist or have just moved to a new place.

Source - Google "Yelp threatening businesses"

Anyone else confused how a bar could legally have no EIN?

Agreed. According to the IRS, you need an EIN if you have employees (and I'm also assuming if you sell alcohol but I'll admit I'm having a hard time finding info about the ATF section) so at a bare minimum we could assume that bar has zero employees?

It could also be that they don't have their EIN handy and would need to go to an office somewhere to retrieve it but are unable to visit their lawyer's office due to covid-19?

https://www.irs.gov/businesses/small-businesses-self-employe...

I agree that an EIN would probably be necessary for a bar.

Just an added clarification is that the EIN is a federal identification, and a liquor license is usually issued by the city. So a city wouldn't need an EIN in order to issue a liquor license. But unless all your bartenders are 1099, you would need an EIN.

As an alternative theory, it could be that there is a store manager for the bar who doesn't have access to the EIN, if the actual owner was absentee. This happened to me at a company I used to work at. I was the office manager, so I was in charge and responsible for everything and handled 99.9% of it, but once a year or so, I would need the EIN and it was the one time I would have to escalate it to the absentee owner who I didn't see very often.

Worst case, you can actually just call the IRS and they'll give it to you (after verifying who you are, of course).

i can imagine this specific bar as being an llc where all the workers are members and not employees. thus, no double taxation.

just a guess

This is one of the very few times I wish jwz were more unpleasant than he normally is.

This is not the catastrophe that I expected. Good grief--time to get a grip.

You should never partake in financial activities of a business you are not involved with or have a relationship with. Its horribly unethical.

I'm going to start raising money on your behalf and your company's. If you don't like it, you can verify your ID with me to opt-out. If you ever find out because I am not planning to tell you directly.

Yeah, I'd ask you to stop. And eventually maybe get around to calling a lawyer.

I wouldn't be off on some foul-mouthed rage-fest about the cosmic injustice of it all. Especially not this week.

Is it supposed to be obvious why these bar owners and restauranteurs are so upset? The article doesn't really make it clear, and it seems like nothing more than an opportunity for them to get free money? I genuinely don't follow.

The only obvious explanation I can see is that they don't like the way it reflects on their image within their customer community.

I imagine it would be similar to unwittingly having someone set up a GoFundMe page for me as an individual. "Hey let's all help this guy out!" Sure, it's free money, but at some cost to my reputation with some people who would consider it a sign of weakness.

Yelp is implying a supportive relationship that does not exist.

Quite the contrary - jwz does not want his business listed on Yelp. He does not like Yelp, and his blog describes some of the issues.

(Eg, Yelp requires/d "a photo in which your whole face can be seen" while DNA Lounge wanted to use "our logo as the image" - quotes from jwz's blog.)

How would you like me telling everyone that "I'm frank_nitti's best friend", and (honestly) raising money for you, when you don't want me in your life?

wk_end comments about it being "free money".

DNA Lounge already has a Patreon page at https://www.patreon.com/dnalounge and a one-time donation page at https://www.dnalounge.com/donate/ .

What happens if an alternative GoFundMe site, auto-generated by Yelp, results in a reduction of the overall donation stream? Then it wouldn't be "free money", would it?

So, who decides if this plan is appropriate for the business?

Hint: not Yelp.

>The only obvious explanation I can see

I think the opinion restaurant owners have of yelp ranges from dislike to outright loathing. Yelp has the reputation of being a bully and essentially extorting restaurants for money. Most of the negativity is probably because of that. If it were someone like Google doing it then there'd probably be a lot less outrage.

Gofundme sets the default “tip” (kept by Gofundme) to 15% of the donation.

> However, critics of the partnership fast discovered that GoFundMe was setting the recommended tip, which is how GoFundMe funds its own operations, at 15 percent.

Yeah, that's pretty slimy. That wasn't in the original article that was posted, which was in Eater and very short on details [1], consisting mostly of jwz's expletives. At some point the mods changed it to point to the better Verge article.

(It's a little frustrating that me and several other early commenters are getting hammered with downvotes because we pointed out how lousy that original article was, context that's now been lost. And unlike the mods, I can't go back and change my post retroactively.)

[1] https://sf.eater.com/2020/3/27/21197236/yelp-dna-gofundme-wr...

Yelp has a very poor reputation with small businesses. They endlessly harass you with sales calls and if you decline their services people have reported their reviews being negatively affected.

Most of all, don't claim to represent a business unless you actually represent them.

If you spend your life creating a business to build a reputation why would you be mad that a company as shady and dishonest as Yelp to put up an ad begging for charity when you may or may not need it, or want it? Yelp is a horribly unethical business, for them to step in and potentially ruin my business without my consent to do so is huge.

I do wish the article touched on what the owners' actual complaints are. The only two that come to mind is:

1) Owners who aren't active on Yelp may never notice this feature, and so the money is never claimed.

2) Yelp may be taking a cut? But I can't find any evidence to substantiate this claim.

Edit: The article has been greatly edited since this post, and any additional points of frustration can be found in the children comments.

I think they take issue with Yelp deciding they need charity for them. Many reputable business don't want to beg or appear desperate.

I’d be pissed off, if I have a business the last thing you want customers and suppliers knowing you are struggling

That's the _only_ justification (and it's a extremely weak one) I can see for making it opt-out - it doesn't single you out as struggling, its the default.

My guess is that they feel like Yelp is kind of taking over responsibility without their permission? I'm not a business owner but I imagine I'd feel quite protective of all aspects of it, especially when asking for money (even in dire circumstances)

3) They have their own plans to make money now, and this conflicts with it

3.5) worse if said messaging tied around not wanting donations, but e.g. selling gift cards or other things that give a benefit instead

4) They now have extra work to do that they didn't ask for

5) Yelp claiming "all proceeds going directly to the business" without having set up a channel for proceeds to be transferred

Well, let's see. They're soliciting for _donations_ to a business that hasn't asked for it and possibly doesn't need it. I doubt JWZ needs it. If you want to throw money at something, how about a legitimate charity. Maybe this would be welcome if it where opt-in, but c'mon. What's the point of trying to ram a GoFundMe down everyone's throat?

I mean, imagine of Facebook tried this and started spamming your friends asking for donations to help you. I can't believe that even in Silicon Valley anyone can be this tone deaf.

> I doubt JWZ needs it.

Dude's broke AF. https://www.dnalounge.com/backstage/log/2016/12/19.html

Lol I didn't think he would setup that HN-redirect-to-ballsack for his bar's website too

Might be the same physical server

Hahahhahaha I loved that redirect when the referrer is HN. For the confused: copy the link and manually navigate to it in a new tab.

"In the 17 years since I signed the lease on DNA Lounge, I've spent about five million dollars on it. ... DNA has never turned a profit. ... Well, here's the thing: I've run out of money."

There were also two failed pizza restaurants involved. One reason, when someone got some money from a startup and asked HN what to do, one of my comments was "Don't buy a restaurant."

Now we have Yelp mooching off a very marginal industry. That's pathetic.

One of the big breakthroughs of the tech boom has been developing new ways to squeeze money out of poor people. Uber, Lyft, Doordash, Grubhub... What "tech"? - they're job shops.

From TFA:

> However, critics of the partnership fast discovered that GoFundMe was setting the recommended tip, which is how GoFundMe funds its own operations, at 15 percent.

Let's say it becomes public knowledge that Hackernews user prophesi is experiencing some sort of problem and that you could arguably use some charitable donations.

Let's now say I, user himinlomax, set up a fundraiser in your name without telling you. We've never talked before, you don't know who I am, but you notice that I play up how terrible your situation is, and ask people to send ME money on your behalf. Also when you ask me to stop I request a copy of your driving license and a picture of you with a shoe on your head.

How would you feel about that?

That's a cool exaggerated example, but it's common knowledge that restaurants everywhere are currently struggling. The ID request is the only part I'd personally be outraged by.

The only exaggeration in his comment is the shoe, and that hardly changes the substance of his comment. Yelp is very clearly in the wrong here. If you can't see that, your moral compass needs to be re-calibrated.

Yelp isn't clearly in the wrong when you live in a society where you need to depend more on corporations than the government. Platforms like GoFundMe play a critical role in providing coverage for people who would otherwise would be left stranded in their governmental care, or lack thereof.

Sure, surface-level pride is important for restaurants. But not if they're in the USA in the middle of a pandemic.

I'll also leave this here: https://news.ycombinator.com/item?id=22704051

It doesn't matter what sort of society we do or should live in. Yelp is in the wrong for doing this without the consent of the supposed beneficiaries. This shouldn't be hard to understand.

Seems like manufactured outrage. The screenshot and messaging look pretty clear to me: "Covid19 has made it tough for local businesses and their employees. Share your support by donating..."

No doubt yelp has done some shitty things in the past, but I really don't see how raising funds for distressed businesses could be one of them.

Wouldn't you think after that prompt that this is something the business owner wants to happen, and not something that Yelp decided to create without coordination, and potentially conflicting with the actual businesses plans of raising money?

"All the proceeds go directly to the business" also seems unlikely if there wasn't any coordination to set up payouts beforehand.

Raising funds for a distressed business using their trademarks and branding without their consent is pretty shitty. A substantial part of business is just in branding and controlling that branding.

NGL, I'm not really sure why this is such a big deal. i understand it being done without the owners' express consent - that would piss me off too - but Yelp is just trying to help. I'd totally understand a "well, thanks, I guess, but what the fuck?" attitude than the vitriol the person at the end seems to be spouting.

Am I just missing something? Why wouldn't these businesses want people to help them out in this? Is it just the lack of notification and consent gathering?

I mean imagine you have a bar and although you needed to close it due to covid19 you are still good financially. If all of a sudden someone else decided to ask your customers for money because you might need it, wouldn’t that be weird? I wonder why such things aren’t just opt-in. I mean it’s a really nice and good thing, but Yelp proactively activating it makes me believe they are bad people and have some kind of revenue/fee share model in place.

It puts the owner of a for-profit business in the position of looking like they are looking for handouts from their customers. Someone who is strongly against that (on grounds of either ethics or pride IMO) would be justifiably offended, if not quite to the level of vitriol in the headline.

Just one example: Some places in San Francisco charge their customers for a membership already. Having Yelp do this completely kills the trust your customers have in you.

Yelp does not own the relationship between businesses and customers. I don't understand why this isn't obvious. Hell is full of good intentions.

Optimistic of you, to assume good intentions here.

> Hell is full of good intentions.

Hell is full of 15% to GoFundMe without disclosure, and requiring multiple pieces of PII to opt-out.

You should never partake in financial activities of a business you are not involved with or have a relationship with. Its horribly unethical.

Especially when you spend so much time to build an image, a brand, a relationship with your customers, it automatically be associated with a company with such an unethical past, poor brand, etc.... They are ruining years of hard work by the owners without asking them for any sort of consent? I would never want to be associated with Yelp, way more damage to my brand than help.

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