There’s a glaring problem in the recent class-action lawsuit demanding that Yelp pay its horde of volunteer reviewers: If Yelp shelled out for each review posted on the site in the past nine years, the company could owe $12.8 billion -- billion! -- to its users.
That number is based on the 47 million reviews Yelp has racked up since its launch, and the $273/review repayment that one man involved in the suit says he is seeking.
Daniel Bernath, an Oregon-based disability lawyer, Portlandia extra and all-around Internet personality, wrote on Facebook on Sept. 14 that he was “filing a class action lawsuit” to get Yelp to pay $273 per review and urging others to sign on. It’s not clear how Bernath is involved in the suit, since he’s not named in the filing, but it’s pretty clear that he’s close to it: the class-action's official webpage is registered to him, and he had all the details of the case in September, before it went public.
The suit’s attorney of record, Randy Rosenblatt, wouldn’t confirm that number or make any comment about the case. (“We are not seeking public acceptance or to enter into any contentious discussions,” he e-mailed.) But Rosenblatt already laid out his argument in an Oct. 20 filing. Yelp’s volunteer reviewers, particularly its elite reviewers, are essentially employees, it argues. And because they’re essentially employees, they should get paid for their work.
Many, many other people have already disputed the logic and good sense of that reasoning. But Bernath’s compensation calculations make it clear that the suit has a problem bigger than good sense -- the economics just don’t work.
Yelp is expecting 2013 revenues of only $228 million to $229 million. In other words, paying reviewers $273 per review would cost Yelp 56 times what it makes in an entire year, and almost three times its current market capitalization.
And really, if Yelp reviewers are just slaves writing for the man, why stop there? Theoretically every Web site with user reviews should also be liable. So Tripadvisor -- $945.3 million in projected 2013 revenues, 125 million reviews -- would owe $34.1 billion. Angie’s List, which sees 60,000 reviews a month, would owe something like $196 million a year. We won’t even get started on sites like Amazon and Google Places, which have customer bases in the tens of millions.
Put simply, if user review sites had to pay reviewers what Bernath believes is a fair wage, user review sites would probably cease to exist.
Intriguingly, this also sounds like a quandary that comes up from time to time when discussing the media -- Internet media, in particular. There is clearly a vast world of difference, however, between an intern working 12-hour days for less than a dollar an hour and an Internet consumer voluntarily plunking out a few words for an Internet review site. And even the more litigious interns out there aren’t demanding payment of $273 for every blurb they write -- a number Bernath calls the “fair market value of a writer getting paid a days [sic] wages according to the United States Department of Labor's Dictionary of Occupational Titles.”
Never mind that surely most Yelp reviews take less than a day to write ... and that, at that rate, the “fair market” salary for a writer is nearly $70,000 a year. That's a bit of industry irony not lost on blogger Patrick Coffee, who wrote over at Mediabistro:
"As someone who (barely) gets paid to write about restaurants, I find this story pretty funny. Of course these people aren’t Yelp employees and they have no legal standing to demand payment. But they do have the ultimate advantage, because my kind isn’t long for this revenue-free media world."
Maybe we writers should join the suit.