It goes without saying that reviews tend to skew negative, right? Far more people run to TripAdvisor or Amazon after a terrible experience than an amazing, or even satisfactory, one. Can we also safely say that people are far more brazen with their negative reviews when their anonymity is being guaranteed by the law? Great, glad we can all agree on that. Now let's take a look at the toxic environment that Yelp has created for itself that compounds this problem exponentially, thanks to the super-secret algorithm that they pride themselves on:
Scenario: A small business gets two bad ratings. Now, even though we've all already established that negative reviews often represent the views of the minority, these reviews definitely reflect poorly on the business. This is partly because consumers are always extra nervous and cautious and also because Yelp has so much clout with Google that ratings and reviews pop up at the top of every search. At this point the business has two options:

Option 1: Pay for fake reviews. Sorry if this ruins your faith in humanity, but it happens. People cheat, lie, and yes, pay for fake reviews, despite Yelp's best efforts to cut down on this practice.
Option 2: Ask their consumers to write them a good review. This is the more obvious and ethical route, but certainly not the easier one. How come, you ask? Let's consult the Yelp FAQ:
" Does Yelp publish every review from every user?
No. We get millions of reviews from our users, and our job is to showcase the ones that best reflect the opinions of the Yelp community. These recommended reviews comprise about three quarters of the reviews we get. The remaining reviews are accessible from a link at the bottom of each business’s profile page, but they don’t factor into a business’s overall star rating or review count.
Note that this approach is very different from other sites that tend to feature every single negative rant and positive rave. We do our best to nurture a community of users who actively contribute reliable and useful content."
Translation: Remember that algorithm I mentioned? It decides whether or not it thinks your review is worthy of being shown and/or counting toward the business's rating.
So, keeping that in mind, who do you think has a better reputation with the Yelp super-computer: a brand new real consumer leaving their first review, or a fake reviewer with hundreds of reviews and engagements under their belt? Right, so now we're back to fake reviews. But let's say, for argument's sake, that a consumer of yours loved your business SO much and was determined to get his review published to your page. What does he do next? If you guessed, "Go around and publish a bunch of other fake reviews to beef up his reputation," you are absolutely correct. So you see, Yelp is really just muddying their own waters with their approach that is "very different from other sites that tend to feature every single negative rant and positive rave." They have created a toxic environment that perpetuates a vicious cycle of fake reviews.
Unfortunately for Yelp, they have some pretty heavy competition in the reviews space. Not only doGoogle+ and Facebook have 2x and 10x the number of monthly active users (respectively) than Yelp, but they both also publish any and all reviews to their business' pages. This makes it easier for users to get an honest feel for a brand's rating, easier for businesses to self-correct for one-off bad experiences, and cleans up the overall environment by eliminating the need for superusers who post fake reviews or real users to bump up their clout with fake reviews. And last but certainly not least: The reviews aren't anonymous. They guarantee transparency and also protect the business from trolls.
If Yelp's algorithm isn't the textbook definition of hubris, I'm not sure what is. Do you agree or disagree? What experiences have you had with Yelp's algorithm and the way it filters reviews?