'I hope someone sues you': Yelp is pausing its automated small business coronavirus fundraisers after backlash

  • Yelp is pausing its recent collaboration with GoFundMe in which thousands of small businesses were automatically opted into fundraisers through their Yelp pages. 
  • An announcement of the partnership,  which launched on Tuesday, stated that two companies would be matching the first $1 million in donations to small businesses. 
  • Upon discovering the fundraisers for their businesses, several restaurant and bar owners expressed their outrage on Twitter.
  • In a statement to Insider, a spokesperson for Yelp said that they are pausing the automatic rollout of the new feature while developing a solution for businesses to opt into the program. 
  • Visit Insider's homepage for more stories.

On Tuesday, Yelp and GoFundMe partnered up for an initiative intended to help small businesses struggling amid closures due to safety concerns surrounding the coronavirus pandemic — but the operation has not gone as planned. 

The partnership, described as "a fast and simple way for independent businesses to start fundraisers and accept donations" in Yelp's announcement at the time, set up automatic fundraisers for small businesses on Yelp with fewer than five locations. The announcement also specified that Yelp would not receive a cut of the donations and that the two companies planned to match the first $1 million donated. 

However, the automated fundraisers sparked intense backlash, causing Yelp to pause the effort. 

The initiative began getting negative attention online after several business owners with large followings called out Yelp and GoFundMe on Twitter. 

"Uhhh, what the f—?" Co-founder and Producer of the art and technology festival XOXO Andy McMillan, who recently opened an alcohol-free bar in Portland, tweeted on Thursday. "Without my permission or even notifying me, Yelp has created a GoFundMe fundraiser for my bar."

McMillan originally planned to offer reservations for his bar, Suckerpunch, beginning on March 20, but he was forced to cancel those plans in the wake of the coronavirus pandemic. He only discovered the fundraiser after searching the bar's Yelp page to gauge reactions to the change in plans, according to an audio recording uploaded to Twitter. 

"There was a button to donate to a fundraiser for my bar that I did not set up," he said. "I did not receive an email [about the initiative], I did not receive a call."

He added that the fundraising initiative requires business owners to submit scans of their personal IDs to claim donations — something he was not comfortable doing. Additionally, the site required an Employer Identification Number (EIN) — something he does not yet have, as his business was just opening this month. 

Moreover, he said, despite the waived fees, GoFundMe was setting a recommended tip of 15 percent.

McMillan immediately contacted Yelp, but did not receive a reply. He proceeded to upload screenshots of the fundraiser to Twitter, prompting swift criticism of Yelp and GoFundMe; the post received 1,000 likes and outraged replies from commenters, fellow business owners, and even a former product manager at Yelp.

After the tweet gained traction, a representative for Yelp contacted McMillan — and he posted his account of the frustrating interaction on Twitter. 

"Talked in circles, they're going to call me back. There also doesn't appear to be any provision for Yelp to take the page down," he wrote. 

"I explained to that person that I'm very upset about this and I'm trying to temper my frustration," he explained in his audio recording. "But I tried to tell this person that it was not Yelp's responsibility to make decisions for my business and this is not okay. This should not have been opt-out, it should have been opt-in."

McMillan's XOXO Co-founder, Andy Baio, also weighed in the subject, questioning the logistics of the initiative and challenging Yelp's claim that it was only setting up fundraisers for businesses with fewer than five locations. 

"What happens to donations if the business chooses to opt-out? What happens to unclaimed donations?" he wrote. 

The GoFundMe page for Suckerpunch has since been taken down. 

McMillan and his associates were not the only ones taking to Twitter to voice their concerns. Nick Kokonas, co-owner of the Michelin star restaurant Alinea (among other businesses) tagged Yelp and GoFundMe in a tweet calling the initiative "unconscionable" and a scheme to "take advantage of this crisis."

"Immediately remove all Alinea Group properties. I hope someone sues you…" he wrote. 

Kokonas implored diners to retweet his post, adding that he could not believe that the companies thought the initiative was "a good idea."

As of Friday morning, Yelp has not yet addressed the situation on its main Twitter account. However, the company says it will be pausing the rollout of the fundraisers in an effort to address business owners' concerns. 

"In an effort to get businesses help quickly and easily, a GoFundMe fundraiser was automatically added to the Yelp pages of an initial group of eligible businesses, with information provided on how to claim it or opt out should a business choose to do so," a spokesperson said in a statement to Insider. 

The statement continues: "However, it has come to our attention that some businesses did not receive a notification with opt-out instructions, and some would have preferred to actively opt-in to the program. As such, we have paused the automatic rollout of this feature, and are working with GoFundMe to provide a seamless way for businesses to opt into the program moving forward, as we have received a great deal of interest and support for the program from both consumers and businesses alike."

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