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Opt out fee

petra_r
Community Guru
Petra R Member Since: Aug 3, 2011
21 of 37

@Denis K wrote:

Dear Petra, Thank you for your reply

2500$ as it is  the MAXIMUM, according to" (a) an “Opt-Out Fee” computed to be the greater"  as quoted from https://www.upwork.com/legal/

however it would be the MINIMUM from a point of view not less than


 Huh?

 

Try simple maths.

 

It is the greater (higher number) of either $ 2500 or 15% etc etc etc etc.

 

The greater (higher number) of either $ 2500 or $ 200 (or whatever under $ 2500) is obviously $ 2500

 

In other words, the opt out fee is $ 2500 or more.

dossy
Community Leader
Ed S Member Since: Oct 27, 2017
22 of 37

Am I misreading the   terms of the Opt-Out Fee, or do they make absolutely no economic sense for Freelancers, at all?

 

Under no scenario is it financially beneficial for a Freelancer to pay the Opt-Out Fee, because 7(a) says you have to pay the "greater" of the amounts: basically, it states that $2,500 is the minimum fee, but the maximum fee  (the greatest amount) is the full Upwork Service Fee *plus*  interest.  

 

Can anyone describe a scenario where it is financially desirable to pay the Opt-Out Fee? 

 

Elance's Opt-Out Fee made sense: you paid a percentage of the relationship's value *up to*  a cap of some dollar amount, so if you knew you would be doing enough business with a client so that the fees would exceed the cap, you could save money on fees by doing the  opt-out.  But, the way Upwork's opt-out is structured, there is NO condition where you (the Freelancer) save any money by opting out.

 

The only thing the Opt-Out enables you to do is invoice your client directly: you are still obligated to pay Upwork their fee, and to make matters worse, you now also owe them *interest* on that amount if you opt-out.

Am I misreading the agreement?  What am I overlooking, here?

tlsanders
Community Guru
Tiffany S Member Since: Jan 15, 2016
23 of 37

You're overlooking the fact that they don't want you to opt out. They don't want it to make financial sense for you to buy out--they want you to stay here and pay your fees.

dossy
Community Leader
Ed S Member Since: Oct 27, 2017
24 of 37

Of course they don't want you to, but it's a compromise that a marketplace like Upwork agrees to because the alternative is that  there  is a point where the economy of terminating your account and taking   the client directly, which is a scenario in which Upwork receives NO fees.

 

Sure, Upwork could take you to court (or arbitration, if you're in the US) and try to recover those fees, but the cost of engaging a legal team to file suit and follow through  is likely to exceed the fees that Upwork was entitled to, anyway.

 

So, it's typical for marketplaces like Upwork to offer an opt-out arrangement where the parties can pay a fixed price to the marketplace   so they get some amount of fees, but then the parties save the cost of all the additional fees but can continue to use the marketplace.

 

Currently, Upwork's Opt-Out Fee agreement doesn't make any economic sense, which is equivalent to not having an opt-out fee at all.  I suspect this probably results in people breaking their agreement and opting to take clients off the site and risking getting their accounts closed.  This hurts everyone -- including the freelancers and clients who are happy to use Upwork -- so we should all want a reasonable Opt-Out arrangement.

petra_r
Community Guru
Petra R Member Since: Aug 3, 2011
25 of 37

Ed, the client pays the opt out fee, not the freelancer, and if the opt out fee does not make financial sense to you then you have the option not to opt out or to wait 2 years.

dossy
Community Leader
Ed S Member Since: Oct 27, 2017
26 of 37

Can you describe any scenario where it benefits the client financially to pay the Opt-Out Fee, ever?

petra_r
Community Guru
Petra R Member Since: Aug 3, 2011
27 of 37

@Ed S wrote:

Can you describe any scenario where it benefits the client financially to pay the Opt-Out Fee, ever?


 Why on earth would Upwork want to make opting out "financially beneficial" to anyone, in any way? That is completely nonsensical.

dossy
Community Leader
Ed S Member Since: Oct 27, 2017
28 of 37

I already explained why it benefits both freelancers, clients AND the marketplace operator to offer an opt-out fee that makes  sense in my earlier reply:  https://community.upwork.com/t5/Freelancers/Opt-out-fee/m-p/449563/highlight/true#M274336

petra_r
Community Guru
Petra R Member Since: Aug 3, 2011
29 of 37

@Ed S wrote:

I already explained why it benefits both freelancers, clients AND the marketplace operator to offer an opt-out fee that makes  sense in my earlier reply:  https://community.upwork.com/t5/Freelancers/Opt-out-fee/m-p/449563/highlight/true#M274336



No, you explained why you think they should give a financial incentive to people taking their contracts off site.

Not the same thing at all.

 

dossy
Community Leader
Ed S Member Since: Oct 27, 2017
30 of 37

Aside from Petra, can anyone chime in here, please?

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