Business owners have challenged this model, with some even winning in small claims court.
A broader class-action case was dismissed, with the Ninth Circuit Court of Appeals ruling that it was fine for Yelp to manipulate positive and negative reviews of its restaurant clients. As for the claims of the plaintiffs that Yelp functionally extorted them, the court said too bad; Yelp was under no obligation to be even-handed or fair.
Lots of outrage over this eventually led to a Kickstarter campaign to fund a documentary, "Billion Dollar Bully." The problem has caused Yelp so much reputational harm that the company felt compelled to set up a page on its website with the headline, "Yelp Does Not Extort Local Businesses or Manipulate Ratings."
Nevertheless, the market has mounting doubts about Yelp and its business: the shares have declined 65% from their peak in 2014.
DoorDash: How well does the gig economy pay? That was what a New York Times reporter wanted to find out. So he started working as a food-delivery man for some of the more popular apps, including DoorDash. He discovered that the pay wasn't great -- as little as $5 an hour to as much as $20 for "Jedi Masters" -- and it's falling as the apps attract more delivery people.
It also turned out that DoorDash and others were keeping the tips -- all of which employees were supposed to get -- and using them to subsidize workers' base pay. The subsequent uproar over the Times article led DoorDash and others to change tipping policies.
DoorDash also was sued for using a fake In-N-Out Burger logo on its website and offering unauthorized deliveries for the fast-food chain.
One thing becomes obvious when looking at these companies: they are all in hyper-competitive, low-margin businesses where economies of scale are either minimal or don't exist.
But more to the point, it makes you wonder if these companies actually solve a consumer problem. There are reasonably credible review sites online such as Zagat, so why does anyone need to turn to suspect reviews on Yelp. As for restaurants that already offer meal delivery -- and there are many -- third-party delivery apps are superfluous.
In other words, these are businesses that are responding to market signals the wrong way. Instead of bending the law and trampling all over ethical standards, they probably should rethink their business models -- or just close their doors.