Tempers flare at Yelp’s town hall for small business owners in L.A.

Things got heated Tuesday at a Yelp town hall meeting intended to debunk misconceptions and ease business owners’ concerns about the popular reviews site.

Since launching nearly a decade ago, Yelp has been subject to endless criticism by business owners who accuse the website of manipulating reviews based on whether the companies fork over advertising dollars.

The backlash hasn’t prevented Yelp from becoming the premier site for reviews on everything from restaurants to plumbers. But the veil of untrustworthiness has continued to cloud perceptions of the San Francisco company.

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In an effort to reach out to business owners, Yelp launched a series of town hall events in 22 major U.S. cities this year. Tuesday marked L.A.’s first event, and dozens of business owners -- including active advertisers on Yelp and those who knew little about the reviews site -- were invited to attend.

The two-hour town hall was held in the ornate lobby of the Pantages Theatre in Hollywood. Although chairs had been set out for 200 people, only about 85 showed up.

Yelp spent the majority of the time touting its service and the benefits of advertising, and asked a panel of five people -- two business owners plus three frequent Yelp reviewers -- to share their experiences with the audience.

“You can’t run a small business without Yelp,” said panelist Matt Berman, founder of the Bolt Barbers chain of barbershops in L.A.

But the glowing comments from the panel didn’t sit well with the audience, and when the town hall opened up for Q&A; an hour and a half later, business owners were quick to vent their frustrations.

Many slammed the company for allowing review posters to write inflammatory comments -- one restaurant manager said she cried for three days after a Yelper said her restaurant was filled with Nazis, another said he’d received negative reviews from Yelpers who admitted they’d never tried the food -- while others said they had been subjected to aggressive advertising calls from Yelp.

“I have one-star reviews for my diner from people that have never walked into the place. They’ve never stepped foot, they’ve never tried the food, but they give me one-star reviews. That’s insane. Why would you let someone like that stay on the site?” demanded Craig Martin, owner of Cafe 50s. “I spoke to your office, I called your guys, I emailed, I talked to your salespeople.”

Another business owner, vintage clothing shop owner Reiko Roberts, said the advertising pressure amounted to extortion. She said that when she declined to buy ads, “the lower reviews go to the top and the higher reviews go to the bottom.”

“You’ve had this go on for an hour and a half...What we’re going to have is a great promotion for you guys, but we don’t have time to go over subjects that I think concern a lot of people,” she said, eliciting cheers from the crowd.

Among the biggest complaints centered on Yelp’s reviews filter, which removes suspicious or unhelpful reviews and puts them on a separate filter page. Business owners said many of their five-star reviews from legitimate customers had been filtered, leading to suspicions that they were being withheld because the owners didn’t advertise with Yelp.

Yelp sought to dispel that notion, saying its filter was automatic and based on “several objective data points” that aren’t tied to advertising, said Morgan Remmers, Yelp’s manager of local business outreach.

“The first layer of this filter is trying to suppress any spammy, shill, malicious reviews that it can identify. The second layer that it’s evaluating is the user’s engagement with our site. So we’re showcasing the most helpful, reliable reviews,” Remmers told the audience.

Still, she conceded, “sometimes legitimate reviews from legitimate customers will get filtered.”

Yelp representatives encouraged business owners to flag problematic reviews or contact the company directly. It says reviewers who write posts without actually using a business are in violations of Yelp’s rules.

Even business owners who do advertise with Yelp said they were unsatisfied.

“I pay $350 a month -- for what?” said Mike Musantry, who owns All American Softy ice cream trucks. “But it’s a necessary evil. That’s the problem.”

But others said advertising on Yelp had led to huge increases in business.

Steve Voss, co-owner of FlatRateMoversLA, said he pays $500 a month to advertise with Yelp, which he estimated helps bring in $30,000 to $60,000 a month in business. Despite Yelp’s insistence that advertising doesn’t affect the placement of reviews on businesses’ pages, Voss said he was skeptical.

“People who don’t pay the $500 a month, they get a lot more reviews filtered,” he said.

Yelp has 108 million monthly visitors and 42 million reviews on its site. Although business owners complained that they were being hurt by negative reviews, Yelp pointed out that nearly 80% of the site’s reviews are three stars or higher.

Companies that advertise with Yelp receive several perks including a featured ad that shows up at the top of Yelp’s search results, the ability to upload a video of their business and ads that run on competitors’ business pages.

Business owners who don’t pay up still have access to their businesses’ pages and can respond to reviews, use Yelp’s revenue estimate tool and create check-in offers and Yelp deals.

Another town hall meeting, which will focus on West L.A. business owners, is scheduled for November.

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