Upwork Lying And Trying To Trick People With Their New Fee System

I rarely write something like this but the truth is that Upwork is now simply mocking freelancers, their clients and so much more, in a foolish attempt to increase their profits at everyone else’s expense.

The freelance world is now rocked by the announcement Upwork made about its fees, changing from a flat 10% fee for projects done to a sliding fee structure. From the official announcement:

You’ll pay:

  • 20% for the first $500 you bill your client across all contracts

  • 10% for total billings with your client between $500.01 and $10,000

  • 5% for total billings with your client that exceeds $10,000

Let us not forget about the addition of a fee for every single client that adds money to the Upwork account in order to pay the freelancer for the work done.

What does this practically mean?

It means that you will end up having to pay 20% fee as a freelancer on all the work that you do. Combine that with the FORCED addition of VAT and the withdrawal fees and you end up with quite a lot of your money leaving you. I am not even going to talk about the VAT problem since when I asked Upwork to SHOW ME the law that forces them to do that, they failed to respond. According to EU law, you are the person responsible for such VAT payments and when you have clients that live in the US and work with EU freelancers, Upwork is actually not obliged by any law to pay any VAT on those projects. That money lands in their pockets.

Leaving the VAT part aside and getting back to the current fee system that Upwork will implement in June or July (I do not remember exactly and it is irrelevant), we are faced with something that can only be described as lying and tricking people.

Upwork Does Not Care About The Community

Every single announcement made is done with a “focus” on the community and Upwork keeps telling everyone that they have the community in mind. Well, the community speaks and nobody listens to them. You can check out this post and see 700 comments in the past 20 hours,surely many more by the time you click. All of them say only bad things about the move and about how Upwork is practically destroying its own business.

Upwork responded to one of the guys complaining by saying:

since our earnings are based on income earned via our platform, we are only successful if our community is. This decision is based on creating pricing that will support our community better long-term.

Well, given the fact that the VAST MAJORITY of freelance projects done on freelance platforms between 2 parties are under $500, how is that supporting the community? We also have this lovely thing in their FAQ:

Upwork short business terms

This is just like answering with “we will eventually do things better” to the question “What do I do if I lose money now?” Total lack of awareness and understanding of the freelance market.

Upwork Lies To You – Proof!

Upwork takes their lies to a whole new level, one that simply cannot be denied, jabbing at the competition and telling LIES about the competition. Take a look at this:

Upwork Bullshit

In case you were not aware, Matt Barrie is the CEO of Freelancer.com and its founder. Even he had to step in and talk about such a blatant lie, responding from his PERSONAL Facebook account.

How LOW can you be to say that the competition’s fees are DIFFERENT than what they truly are?

Even Clients Are Upset

When you choose one side, you normally stick to it. You do not upset both parties. With Upwork, they managed to make even the clients mad. Besides the addition of the fee, Upwork claimed at one point that they have to invest in client acquisition. Well, most of the clients that chose Upwork in the past did so without those ads that they constantly run.

Upwork runs many ads but they do so to promote their business. The lie is that they do this in order to get new clients, especially at an enterprise level. I often find myself browsing the projects posted on Upwork and I challenge you to find projects posted by large enterprises.

News Flash: Large enterprises directly look for freelancers. They do not use Upwork or freelancer.com or Fiverr, as Upwork would want you to believe.

Clients are upset with Upwork because:

  • there are hidden fees that they do not know about.
  • not all freelancers that bid for a project are shown to the client as Upwork DECIDES who is better suited, not the client, which is rubbish.
  • the quality of the freelancers is going down since good freelancers are leaving Upwork.

The Real Repercussions Of The Upwork Fee Change

Upwork is simply bullshitting people. There is no other way of saying this. I have been working as a freelancer online since 2003. There are some truths about working with these freelance platforms that have to be said:

  • you will RARELY work with a client for projects worth over $500, especially in industries like freelance writing.
  • in business credit card transaction fees are normally supported by the client, in this case Upwork. This should be normal.
  • it will be really hard for new freelancers to get projects since they would need to charge around 25% more than the normal rate.

Upwork is NOT listening to the community and is doing whatever it feels like. This will lead to the following results:

  • long term freelancers like me, people that made tens of thousands of dollars with platforms like this one will LEAVE Upwork.
  • clients will LEAVE Upwork because they will not find good freelancers to get the job done right.
  • the costs of hiring a freelancer will be on-par with signing a direct contract or hiring a person directly.

Conclusions

The sliding fee rubbish that Upwork implements now is not done for the benefit of the freelancers or the clients. It is only done in order to increase the money that Upwork makes, mainly since we are talking about a really large company that has many serious investors, investors that are most likely forcing the current CEO to make more money for them.

Freelancers that will continue using Upwork will be mostly bad at the job they do or will charge a whole lot more for the money that they make. Unfortunately, we will actually have many bad freelancers that will charge more and this will upset clients even more.

Freelancing is all about creating a relationship but it is also about many other things. Money is a big part of everything. When you keep hitting that and reducing the money that people make, you are bound for trouble and Upwork has been doing this ever since they eliminated Elance, which was a far superior service.

 

19 Comments

  1. Anthony Tyner
    1. crucea (Post author)

      Feel free to post it wherever you want, Tony. My next post will actually be a list of all the alternatives to Upwork I can find to help people to get better deals and opportunities. Hope your page grows and people follow. I liked your page just for that.

      Reply
      1. Anthony Tyner

        Awesome. Look forward to your next post.

        Reply
      2. Tracy

        I’m going with guru and leaving upwork, I just hope that guru gets the clients they had. No one will stay there after the 20% rate hike.

        Reply
        1. crucea (Post author)

          Good luck but be a little careful. There are some scammers there and GURU’s policy is not that great!

          Reply
  2. Keshia Burgess

    Someone told Upwork that lying is the best policy, unfortunately they were very misinformed

    Reply
    1. crucea (Post author)

      They basically forgot that people use social media now and inform each other about such stupidity! #DownWork :))

      Reply
  3. jelena antic

    Thanks a lot for this post, it means a lot. I am already very angry at UpWork because of “job success” stupid algorithm. And I didn’t know that clients do not see all of my which is as you said, rubbish. And now when I got that email from CEO….I definitely must to find other way to do my job…

    Reply
    1. crucea (Post author)

      I am currently compiling a list of different alternatives available to Upwork. There are many. You can do the same. You will surely find other options, with freelancer.com being the first one to consider, of course!

      Reply
  4. mph132031gmailcom

    Very Sage post, I like it because it considers the 3, or the 4, or all the parts involved in Upwork business, not only small freelancers, and shows that we all think is true: Upwork lies.
    By this time, I am moving to Guru,com and will also do it to freelancer.com, but as we all know it takes time; much time to build a profile that make you distiguish from others, and that is time that none’s pay for. So let’s start again….
    I’ll share your post. Thanks.

    Reply
    1. crucea (Post author)

      There are many other things that can be said and that can be highlighted. Unfortunately, this is only a small part of what can be discussed. There are really large investors behind Upwork and they are only interested in profits. This is what leads to the really bad decisions we see today.

      Reply
  5. F.

    It’s supposed to roll out in June–less than a month’s notice. They timed it precisely so it would be too late for their precious “community” to do anything about it.

    Reply
    1. crucea (Post author)

      They actually gave exactly a 1 month notice before changing fee structures, which is required by law in many US states as far as I know. News actually broke because of Reddit, then was picked up by social media and then the official message came out. That is how I remember things went. If I am mistaken, I can be corrected. Even so, not much time was given, yes.

      Reply
  6. richgpearson

    I’m from Upwork, so I’m obviously biased, but I thought it would be helpful to share an objective view of pricing from Andrew Karpie, an analyst who covers all the online freelancer marketplaces:

    Freelancer.com, now a public company, has a very elaborate pricing model that has reportedly produced relatively high monetization. The company reports a “take rate” (net revenue/gross payment volume) of about 25%. Freelancers are subject to a range of transaction and other fees and can also subscribe to different plan bundles. That freelancers are actually paying for access to the platform is made quite explicit. Clients are also subject to a range of transaction and other fees. There are also other optional fee-based services for both freelancers and clients. Freelancer.com also partitions its freelance project business from its mini-project crowd contest business, which could be viewed as a lower tier with lower value and lower fees. Finally, freelancer.com has always charged a transaction fee for payment processing.

    The full article is here: http://spendmatters.com/2016/05/06/upwork-upgrades-itself-with-pricing-model-for-online-freelancer-marketplace/

    Reply
    1. crucea (Post author)

      Hello, So if you are from Upwork, a really interesting question for you: are you “trained” to hit the competition in order to prove that your bad decisions are great? If so, you really need new marketing departments. Getting back to the topic at hand, I will send the article to the Freelancer.com team. I am really interested in seeing what they have to say about this 25% thing since anyone that would do some math and would UNDERSTAND the freelance market will instantly tell you that this is shady. It is only possible in specific situations. Still, we are not talking about this.

      Now, getting to the article, if by “objective view” you mean publishing news as from a press release, yes, it is an objective view. However, that article is nothing except news, no analysis whatsoever. What Upwork fails to understand is the main part of freelance life: freedom. Upwork forces people to work more with the same people, in some industries for hours in order to earn a different fee. This is absurd. Also, there are so many lies that are used by Upwork FREQUENTLY when talking with freelancers that it makes me sick.

      Out of all that I wrote you decided to share an article that basically hits at freelancer.com, again. The TOS was modified as soon as Upwork saw that people AND clients were leaving. Every single person I talked to is leaving Upwork and it is the CLIENTS that recommended this in many situations because they value their freelancers. It is obvious that Upwork does not. Do you want to know what the real experience is for a GOOD freelancer at freelancer.com? NO membership cost because he does not need it. All extra perks are irrelevant because of the quality that he offers. They only pay 10%. Now Upwork wants them but the real backbone of ANY freelance platform is formed by the little freelancers. Those are the ones that carry the work because of the projects UNDER $500.

      Now, if you are the Senior VP of Upwork, which you seem you are, it is very hard for me to believe that you do not understand the premise of the move, especially due to your MBA in marketing and finance. Adding that processing fee was long overdue, yes. It is 100% normal. Changing terms and conditions when the community reacts badly, moving to a fee structure designed to increase company revenue, lying to users, not allowing them to close their accounts, threatening with non-compete opt-out fees and stuff like that is unacceptable.

      Reply
  7. richgpearson

    Hi Adrian,

    No – thanks for approving my comment. Spend Matters, the property that published this article, covers all the freelancing platforms. We didn’t issue a press release for our pricing change, but we did respond to questions that they sent us after they learned of our changes.

    Freelancer.com is a public company that must publish its results, making it easy for anyone to find information on what they charge and how much they make from freelancers and clients.

    Everyone at Upwork understands that this is a big change that will require some freelancers to change their strategy, particularly when evaluating a new client who has posted a job that will be <$500.

    I thought I would also address your comments about our Terms of Service (TOS). Most companies, including Upwork, provide that their TOS can be amended by posting a revised version on the site. So, in connection with our pricing announcement, we will be updating our terms of service to include the new fee structure, giving our community 30 days notice.

    I hope that helps – we'll be hosting Town Hall meetings next week in case you have additional questions or are looking for more detailed information on the rationale behind our price changes.

    Town Hall Webinar #1 – May 10, 2016 at 9am-10am Pacific: https://attendee.gotowebinar.com/register/3884714592533331459

    Town Hall Webinar #2 – May 12, 2016 at 5pm-6pm Pacific: https://attendee.gotowebinar.com/register/1593302673434372867

    Reply
    1. crucea (Post author)

      I always agreed with the fact that freelancers charge a lot less than they should, especially when they first start out. This is something that will never change and all around the world this is a huge problem for steady contracts as well as per project contracts. Instead of charging what they should, they do opt for lower prices just to get a job. This has been hurting the entire freelance industry for years now. The real problem is not that. You fix such a problem through education and communication, NOT by making it harder for that person to work.

      When they end up paying more fees freelancers jump ship. It is as easy as that. Even with the freelancers that make over that $500 per client, they will instantly want to change ship because of THE WAY IN WHICH UPWORK COMMUNICATES. I guarantee that most people did not even look at the CEO video because they had no real reason to do so.

      Then we have the lies. It is unacceptable for a company like Upwork, one of its size to use unethical marketing techniques. This is the reason why many are upset. If you would stick to announcing a fee change that would be effective in like 6 months and you would then offer the support that would be needed to educate why that is a good thing, everything would be different and the reaction of both clients and freelancers would be different. When you roll out a major change and you tell so many that they will pay more in fees WITHOUT EXPLAINING WHY THAT IS A GOOD THING FOR THEM, you messed up. You will have no support. People will work just once with a client and then take the work off-site. How is that a good thing for Upwork?

      Lies about how much freelancers are charged, a totally unprepared social media department, a very bad customer support service when some problems appear, a very bad message system filled with errors, 20% fees for new clients. This is what people see. The freelance world is not just made out of coders. It is also made out of graphic designers and content writers, just to mention some. They will rarely have work of over 500 with one client. These are the people that will be lost.

      You want to make Upwork better? Get rid of that stupid no minimum bid and go to a minimum bid per projects. This is how you get rid of those problematic low bids, not by making them pay more. Clients will not care about this and although it is clear that you are looking for larger clients to use the platform, you hit the freelancers instead of educating them. You are not changing anything. You remove people and guarantee that new freelancer retention will be lower. Look at the sign up rates and at the number of people that closed their accounts. Take into account the data that you have access to. In a few days the CEO will receive a case study that will be done by a research company about how freelancers see the move. Take that into account. Listen to the people that make the money for a company. In this case it is the freelancers, not the clients. The vast majority of former Elance users hate Upwork and nobody can blame them since the service as a whole is a joke to what Elance managed to offer. Then, instead of making things better, everything becomes worse. So many problems in what is happening with Upwork.

      Reply
  8. Anna
    1. crucea (Post author)

      I think I already told you on Twitter Anna, or I am mistaken, that this type of petition does not work. People do not trust them and do not sign them because they simply do not have any effect. The best thing that people can do is to use the services that they feel comfortable with. You have to stand up to what you believe in. I made thousands of Upwork and closed my account, moved to another platform. That is how you make a statement.

      Reply

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