Yelp’s ‘Black-Owned’ Tag Was Meant To Help — In Detroit, It’s Doing The Opposite, Finds Report

Yelp review that mentioned 'Black-owned' due to the implementation of the tag coincided with a reduction in overall ratings.

Yelp’s introduction of a “Black-owned” tag for its listings coincides with a decline in ratings for the Detroit area, according to a new report.

The introduction of the tag seemingly increased visibility for Black-owned establishments, The Conversation reported. More reviews mentioning Black ownership were posted. Yet, the influx of reviews coincided with a reduction in overall ratings in Detroit.

Local and non-local users who acknowledged Black ownership in the reviews tend to leave a lower rating, with an average of 3.03 stars. Patrons who indicated no awareness of the owner’s race left higher reviews, with an average rating of 3.78. In Detroit, Black-owned restaurants saw a slight decrease in their star ratings. Those businesses went from an average of 3.91 stars to 3.88 after the introduction of the tag.

Researchers Mathew Bui and Cameron Moy gathered 250,000 surveys from the Detroit and Los Angeles areas. Then, identifying the mention of “Black-owned” reviews, they were able to narrow their field of scope.

The study’s originators believe the outcome stems from Yelp’s user-based dynamics. Yelp is largely used by primarily white, educated, and affluent customers. The study suggests that increased visibility for Black-owned businesses may have produced more “cross-cultural” interactions. This sometimes led to reviews referencing slow and rude service.

Researchers stress that digital interventions, despite good intentions, are not universally beneficial and can sometimes inadvertently worsen existing dynamics. Although Bui and Moy’s general research suggests trends began in 2020, the trend of Black businesses lagging persists today.

On June 28, the State of Black Business report revealed that, reviews aside, Black businesses are struggling. Despite the initial 30% rise in Black businesses from 2018 to 2021, Black businesses are being shut out. Black businesses are less likely to receive venture capital investment; in 2023, only 0.5% of venture capital funding went to Black founders, according to the National Urban League.

With the active and targeted dismantling of diversity, equity, and inclusion initiatives, Black businesses are struggling financially. Yelp’s attempt to highlight those businesses has seemingly backfired, adding to the already difficult path owners face.