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Re: Why is Upwork encouraging freelancers to gouge the people hiring them?

Active Member
Doug P Member Since: Jan 3, 2019
1 of 20

Ive used upwork for several years and spent tens of thousands hiring freelancers.  Ive always been a very supportive user and fulfilled my end of the bargain every time.  Im decent to freelancers, give good ratings when warranted and give clear insructions on what to do.  So why is Upwork instructing freelancers to gouge me?

 

When I set out to hire some one I search very carefully - I decide what skills I need and what range of pay is in the budget.  Then I search, review skills and ratings, and interview candidates.  I spend lots of time doing this.  Then I narrow my search down to the right person and offer them the job.  They then raise their rate that was posted.  This NEVER happened until a few months ago.  Now it happens EVERY job.  In one case the rate the freelancer "offered" wanted was 400% over their profile rate.  More typical is 30%-50% jump over their profile rate.  This is preposterous. I even asked this particular freelancer why she did that and she basically spilled the beans on Upwork.  She stated that when my offer to hire came in, Upwork encouraged her to raise her rate for my offer (the profile rate stayed the same)!  Seriously?  So I make an offer in good faith and you use my goodwill against me?  Also, very strangely, after I made an offer, I was no longer able to see the candidate's original profile rate - is it being intentionally obscured to prevent employers from seeing the original rate?  This is really a terrible practice.

 

The freelancer should post a rate they are comfortable with and feel they are worth and stick to it for the next person who hires them.  If they feel they are worth more, they should raise their profile rate.  As jobs progress and either the freelancer becomes busier, their skills improve, or the job demands more, the rate can and should be re-negotiated between the two parties.  But Upwork's practice of screwing the employer makes for bad blood between employers and employees and undermines the very purpose of Upwork - a marketplace where people can come together.  One of the most important elements of a market is visibility of pricing.  When you start messing with that, you undermine the very value Upwork brings.

Community Guru
Jennifer M Member Since: May 17, 2015
2 of 20

They have this strange "suggested rate" thing when you bid. I think it only shows on our screen if our profile rate is lower than whatever they've calculated. I would really like to know how it's calculated, because it's suggested some crazy high rates for some jobs I reply to. Like, I'm all for not leaving money on the table, but I think sometimes the calculations are too high. 

 

I think they are using some outside API from what I can tell but well... I think they doinitrong.

Moderator
Valeria K Moderator Member Since: Mar 6, 2014
3 of 20

Hi Doug,

 

In some cases freelancers will see a Rate Tip when creating a proposal for a job (not when accepting an offer). We have provided more information about the feature in this announcement. The amount is calculated based on the following data:

  • Rates paid on similar jobs in this specific category and subcategory
  • The freelancer experience level this client is looking to hire
  • The freelancer's rates and experience from all of their work on Upwork
  • Supply and demand in this category and subcategory

This is optional and freelancers are free to bid with whatever rate they see fit and further negotiate with the client.

~ Valeria
Untitled
Community Guru
Preston H Member Since: Nov 24, 2014
4 of 20

Doug:

Thank you for your thoughtful account of your first-hand experience with this phenomena.

 

Upwork refers to its new feature as "Rate Tip", and it is no doubt responsible for what you have encountered.

 

You may read more about it here:

New Rate Tip Feature

 

Screen Shot 2019-01-03 at 11.10.25 AM.png

 

Personally, as a freelancer, my rate is my rate, and I just ignore the "rate tip" feature. But apparently many freelancers are NOT ignoring it.

 

I do not believe Upwork would use the word "gouging" to refer to what freelancers do when to change their rates this way. I think Upwork would use other terminology, such as "Why is Upwork encouraging freelancers to charge hourly rates higher than their posted profile rate the people are hiring them?"

 

But regardless of what phrase is used to describe this, the practice is the same and your assessment is accurate.

 

If I may offer a recommendation, I would say that paying people their profile-posted rate is very fair and reasonable, and that if a freelancer offers you a higher rate, you can decline their suggestion and simply say something like: "Don't worry about that. Can we agree to $XX.00 per hour, the rate on your profile page?"

Community Guru
Will L Member Since: Jul 9, 2015
5 of 20

Doug,

 

What you are describing is unethical, in my opinion, a kind of bait-and-switch that I am not surprised is unacceptable to you.

 

As a freelancer I would only change my initial proposed rate on agreement with a client. Many clients post jobs in my specialty (business plans and complex financial projections) without really knowing what they are asking for. As a result, they don't really have any clue what their project will/should cost. (Offering $250 for a project that will take me 30 hours to complete means a client either doesn't know or care how much time and expertise their project requires, or they don't care about the quality of what they will receive. Another freelancer may be out their that better fits their needs than I do.)

 

When looking for new projects or responding to client request for a proposal, I usually ignore very low-priced projects and projects that the client has really provided no detail on in their Upwork posting. But I will sometimes bid on a low-priced project at the client's stated level and make it clear my proposed pricing is just a placeholder until we talk and I better understand exactly what will be required. I'd say only about 10%-15% of these prospective clients even reply to my proposals, but these turn out to be good clients. 

 

I have no idea where Upwork's pricing algorithm gets its "suggested" rate on various jobs, but I always ignore it. It's sometimes a large multiple of my standard rate for no apparent reason (!); I don't remember any example where it was lower than my standard rate. Of course, the more money freelancers charge the more money Upwork makes on its fees, but that's how free markets work.

 

Like the Job Success Score, Upwork has left the calculation of the "suggested" bid rate to some sort of blackbox algorithm that really isn't up to the task. And, also like the JSS, Upwork has provided no justification why it is useful.

 

As a client, what minimum JSS do you require before you will consider hiring a new freelancer?

Community Guru
Phyllis G Member Since: Sep 8, 2016
6 of 20

I don't think the Rate Tip is encouraging FLs to "gouge" clients. I see it as another poorly conceived attempt by UW to help FLs charge more so everybody earns more. But so many variables are in play that I don't see how an automated tip could possibly supplant the FL's judgment, and among experienced professionals, I'm sure it doesn't. I bid what a project is worth to me, based on my understanding of the scope of work. If I come in a lot higher than the client expects and my proposal doesn't compel them to rethink, then I never hear from them. That's OK.

 

To what others have said, I would add that my profile rate is intended to let clients know which ballpark I play in. Sometimes my proposed fee (fixed or hourly) is higher, sometimes a bit lower, depending on the specifics of a project. People who do more production-oriented work can probably stick to a set rate more consistently. My projects are all custom and the scope and depth of my engagement can be all over the map.

Ace Contributor
Joseph M Member Since: Feb 17, 2015
7 of 20

Be sure that the reverse happens to freelancers all the time, too, just perhaps without assistance on the hiring page.  I can't count how many times I've submitted detailed proposals with my rate included, done a sample for the job, and been turned down because I wouldn't slash my rate in half.  It's a dirty trick to try and lure people in on the premise of time spent.

 

To that end, as Phyllis said, I use my profile rate as a general base.  There is a reason we are able to adjust our bids for hourly projects, and aren't confined to just bidding at our profile rate.

Community Guru
Renata S Member Since: Jun 10, 2014
8 of 20

@Phyllis G wrote:

I don't think the Rate Tip is encouraging FLs to "gouge" clients. I see it as another poorly conceived attempt by UW to help FLs


@ @Phyllis
Do you suppose there's a special department devoted to formulating Bad Ideas? Or do they just arise spontaneously due to holes in the AI? 

Community Guru
Virginia F Member Since: Feb 15, 2016
9 of 20

@Doug P wrote:

Ive used upwork for several years and spent tens of thousands hiring freelancers.  Ive always been a very supportive user and fulfilled my end of the bargain every time.  Im decent to freelancers, give good ratings when warranted and give clear insructions on what to do.  So why is Upwork instructing freelancers to gouge me?

 

When I set out to hire some one I search very carefully - I decide what skills I need and what range of pay is in the budget.  Then I search, review skills and ratings, and interview candidates.  I spend lots of time doing this.  Then I narrow my search down to the right person and offer them the job.  They then raise their rate that was posted.  This NEVER happened until a few months ago.  Now it happens EVERY job.  In one case the rate the freelancer "offered" wanted was 400% over their profile rate.  More typical is 30%-50% jump over their profile rate.  This is preposterous. I even asked this particular freelancer why she did that and she basically spilled the beans on Upwork.  She stated that when my offer to hire came in, Upwork encouraged her to raise her rate for my offer (the profile rate stayed the same)!  Seriously?  So I make an offer in good faith and you use my goodwill against me?  Also, very strangely, after I made an offer, I was no longer able to see the candidate's original profile rate - is it being intentionally obscured to prevent employers from seeing the original rate?  This is really a terrible practice.

 

The freelancer should post a rate they are comfortable with and feel they are worth and stick to it for the next person who hires them.  If they feel they are worth more, they should raise their profile rate.  As jobs progress and either the freelancer becomes busier, their skills improve, or the job demands more, the rate can and should be re-negotiated between the two parties.  But Upwork's practice of screwing the employer makes for bad blood between employers and employees and undermines the very purpose of Upwork - a marketplace where people can come together.  One of the most important elements of a market is visibility of pricing.  When you start messing with that, you undermine the very value Upwork brings.

 

Oh goodie ... more insight into the lengths Upwork will go to p__s clients off. Can't wait for the next revelation.


 

Highlighted
Community Guru
Will L Member Since: Jul 9, 2015
10 of 20

Virginia,

 

There is no reason for clients to think Upwork expects or encourages freelancers to post one (low) rate when first applying for a job and then double or triple their rate requirement after the client says they want to hire them.

 

The "recommended" rate is just another indecipherable black box calculation that at least some freelancers ignore. I know I do.

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