What happened?

Dutch Television show RamBam demonstrated how easy it is to fake reviews on dining platform The Fork and it revealed how this platform manipulates reviews to make all restaurants look better than they actually are. These findings highlight some of the vulnerabilities of the digital economy which relies so heavily on reviews provided by customers. Other platforms, including Airbnb, have also been accused of inflating suppliers’ ratings to boost sales and virtually review systems can be manipulated easily. That is, suppliers can write fake reviews for their own services and their competitors, incentivize consumers to write positive reviews and hire fake-review services that sell 5-star ratings.

What does this mean?

In the digital economy, to gain consumer trust, review systems tend to replace costly, high-friction, features of the old economy. Food critics, travel guides, taxi companies and hotel chains used to provide consumers with guidance and reassurance. Critics wrote (supposedly) reliable reviews of (a limited number) of restaurants and taxi companies tried to makesure their cab drivers were well behaved and knowledgeable. Today’s platforms leverage assets without owning them (e.g. restaurants and bedrooms) and command workers without actually knowing or employing them. Their review systems thus replace the expensive means of control that were used by businesses in the past (hotel managers, workers training). Yet, when their review systems fail to remain credible, their business model largely falls apart.

What’s next?

Independent and high quality review services are hard to come by. A platform like The Fork, owned by Tripadvisor, thrives on reservations made through the platform and this presents an incentive to inflate ratings. Roughly the same goes for platforms such as Booking, Airbnb and Uber; while they have good reasons to maintain reliable reviews, all too critical reviews aren’t good for their business. One solution may come in the form of truly independent review platforms whose business model is solely based on the reliability and quality of reviews (e.g. Google presents itself as such). Another option could come in the form of new brands that, similar to the old economy, build a reputation of high quality services on top of the digital economy. Such brands could represent high-quality Airbnb accommodations or collectives of, otherwise, independent restaurants.