The Problem With Online Reviews

The good, the bad and the ugly

I often take my coffee at a place with a 3 stars rating on Google, but it serves one of the best coffees in the city. The reviews come from two people who had once a bad experience. And Google shows to everyone that it has 3/5 stars without saying that it is one the best places to have a non-Starbucks, coffee.

Some companies keep manufacturing certain products only because 10 years ago they received so many 5 stars on Amazon, that it’s almost impossible to retire the product.

My Uber score is 4.7, and the only “bad thing” I do is the lack of conversation with my driver. I always say “Hello”, “Thank you”, “Goodbye” and leave some tips. So apparently for not talking you still get a low score.

For drivers, sometimes all you need is a grumpy passenger who is not allowed to smoke and will give you a one star for that. And then you have to work hard for a month to recover your initial score. Only because somebody wasn’t allowed to do what he wants.

The hysteresis effect

A relative of mine put her villa on Airbnb. And when you are new in a service business, you tend to accept anyone, only because you need ratings. Her first customers were a group of youngsters, and after renting the place, they wanted to throw a party. She did not allow them, fearing they will destroy the house. The group wasn’t satisfied and left a bad, 2 stars, review. She couldn’t rent the house to anyone else anymore. She had to rename the place.

In her case, if she had left the stars, almost nobody would have rented her house. This is an effect called hysteresis — the dependence of the state of a system on its history. It’s the same way banks work when giving loans, and it’s the same way schools operate and so on. We judge something based on a metric that…