Various Internet companies, including Yahoo! Local, CitySearch, AOL CityGuide, have been promising to be the uber-provider of local ratings and reviews for more than a decade.

To date. there isn’t a solid source for comprehensive, credible reviews. There are a number of reasons for this:

• No incentive for users to review. Most sites give users no reason to review businesses. Note to guide providers: Adding to the value of your database is not an incentive for me.
• Reviews tend to bias toward the extremes. The people most likely to review a business are the ones that absolutely hate it or the ones that love it (or own it and are trying to drum up business). Most users don’t bother to rate businesses they’ve visited.
• Readers don’t know that the reviewer ever visited the business. I’ve seen cases where the reviewer is clearly the owner of another business looking to trash the competition.

At least one startup has tried to bribe users to write reviews with promises of iPods, Starbucks gift cards and other incentives. Although this is a reasonable short-term strategy to seed the system, it doesn’t scale. Yelp.com has done the best to incent people to write reviews, by allowing people to compile and publish their own city guide for friends and family. You have access to the content you create in sharable form, with your own vanity URL.

To tackle the second and third issues, it’s useful to look at what I consider the model for ratings and reviews – Netflix. When someone sends back a movie, Netflix sends an email asking them to rate the movie. Rating a movie as easy as clicking on a star on a 1-5 scale. This simple, proactive approach increases the volume of ratings and also increases the likelihood of capturing moderate opinions.

Because it knows what movies a user has requested, Netflix could also weight ratings of those movies higher than ratings of other movies.

A similar system could be developed for local reviews in conjunction with the credit card companies. Companies such as American Express could partner with a city guide provider to use transaction data to solicit reviews. I keep a stack of credit card reciepts on my desk as reminders for me to write a review on Yelp of restaurants I visit. Often I forget. It would be much easier (and I would review a lot more) if I received an email prompting me when the transaction hit my credit card. As a user, I get my own robust city guide that I can share with friends and family. The city guide provider gets more data.

The credit card company gets another reason for me to be loyal to their brand. Readers of the reviews know that I’ve actually visited the place. Amex’s city-branded cards (e.g. IN:NYC) would be an ideal vehicle for such a test.

You could also get a similar closed-loop experience partnering with companies like OpenTable or Rewards Network to solicit their users for reviews.