Reservation-Selling Startup Angers Tech World

Posted at 3:51 PM, Jul 07, 2014
and last updated 2014-07-07 15:59:38-04

ReservationHop (image from CNN)

(CNN, July 7, 2014) — There’s a website that lies to restaurants, making reservations under fake names, and then sells them to you.

If that rubs you the wrong way, you’re not alone. ReservationHop, which launched last week, was hit with a backlash so nasty, it led its creator to call himself “the most hated person in San Francisco.”

And it’s just the latest on a list of recent startups that have some critics complaining that, in the go-go Silicon Valley startup culture, almost anything can attract interest, and big investor money, even if it seems to straddle the line between right and wrong or even reality and parody.

“This is irresponsible and sleazy and exactly what people hate about startups sucking the life out of San Francisco,” Wired senior writerMat Honan wrote of ReservationHop on Twitter.

Creator Brian Mayer says he wrote the app, which is San Francisco-only for now, after waiting 30 minutes for a burrito.

“Is this even legal? Is it ethical? Restaurants are going to hate this!” Mayer wrote in a blog post about the “overwhelmingly negative” response he’s gotten. “To be honest, I haven’t spent a lot of time thinking through these questions. I built this site as an experiment in consumer demand for a particular product, and the jury’s still out on whether it will work.”

Complaints centered largely on two issues: making money off something that should be free and hurting restaurants by scooping up reservations that, if not purchased, could lead to empty tables and lost revenue.

The going rate for a reservation on the site appears to be $12. After you pay, ReservationHop tells you the fake name to use.

Mayer said that he’s been able to cancel reservations that aren’t purchased several hours in advance and that “in the interest of ethics and fairness,” he wants to talk to restaurants about working with them directly.

Selling services that would otherwise be free has become something of a trend in the startup world. Several newparking apps let users in crowded neighborhoods post when they’re about to leave a spot and charge someone for the opportunity to take it.

San Francisco’s city attorney has threatened to sue several of those startups, saying they break the law by selling what should be a public commodity.

Not all apps raising eyebrows in Silicon Valley are so controversial. Some just shed light on the fact that almost any idea can draw investors with dreams of big payouts in what could be a new tech bubble … or can at least have venture-capital-seeking creators firing off news releases in hopes of luring a shark.

One, Washboard, wasn’t long for this world. Its concept: selling you money for more money.

Selling you quarters to do laundry, to be precise. For $27, the startup would mail you $20 worth of quarters.

Washboard went under late last month, but not before raising the ire of some in the tech world.

“Probably smart,”Valleywag’s Sam Biddle wrote of the closure, which apparently came when the startup had drawn fewer than 10 customers. “But at least they will be ‘focusing (their) energy on something ultimately more worthwhile,’ which would be anything. Literally anything. Lying down in the middle of the street and screaming would be ultimately more worthwhile than this.”

Thenthere’s Yo.

The messaging app does one thing and one thing only. It lets you send the two-letter greeting, “Yo!” to a friend. No, that’s not a parody (though it has inspired at least one. Yo, Hodorlets users similarly send a single word to friends, referencing the “Game of Thrones” character who speaks only his name).

That idea? It raised $1.2 million from investors. And reportedly has more than 300,000 users.

“Let me stipulate that in the tech world anything with messaging is hot,” wrotethe Globe and Mail’s Shane Dingman. “Single-service apps are also hot. The surface of the sun is hot … that’s where I would like to fling myself rather than take Yo seriously.”

There’s no shortage of analysts speculating that this latest round of apps could be a sign that a tech bubble along the lines of the one that caused early Internet stars to crumble could be upon us. If nothing else, they predict, investors will soon sober up and put their cash into the Facebooks and Twitters of the world rather than vaguely defined startups.

Which makes sense; it’ll leave more money to buy their dinner reservations.