So bumping up to 20% was bad enough - I now have to work longer and harder for less money. At least oDesk and Elance kept each other in check, and now this is what we get with a monopoly. We can complain to no one.
But what's with the bad math that errs on the side of Upwork, as well?
A bid of $100, taxed at 20%, becomes a grand total of $125.
This is not a monopoly. They were losing money on smaller contracts. When a business is losing money they have one of two choices raise rates or shut it down. Personally I'm glad they chose to raise rates. As per your question, others here will be able to explain it better than I can but the math is right.
Well, they say they were losing money. Hard for me to figure that out, since it's an online platform that collects fees on every job that goes through. Where's the extra labor costs, except for their customer service department after the extremely messy rollout with the new platform?
20% fee is charged on the amount the client is billed not the amount the freelancer receives.
The client is billed $125. 20% of $125 is $25. After the fee is charged, the freelancer receives a payment of $100.
Yeah yeah, I get it. And really I'm just blowing off some steam here. I've been pretty sore about Upwork's conduct ever since software bugs on their end kept me unable to login for 5 weeks when they launched, costing me thousand of dollars. Of course there's the "if you don't like, leave," rejoinder, but I've been freelancing quite successfully on Elance since 2008, and there's not really a viable other place to go.
But if I could, I would delete the thread, since no one comes across looking good in an online argument.
I understand the math, but I still find it sneaky. The "client is charged 20%" is a matter of perception, since in reality the freelancer is taking into account how much the overall price is and how much the client is willing to pay overall. Call it whatever you like, but in the end it's a percentage coming out of the overall project.
In the normal world, in every other business transaction that has the client-agent relationship, the math goes client fee + agency % = amount. Not amount - 20% = client fee.
Anyway, I'm splitting hairs here. Maybe I should have just said "20% sucks!" and moved on with my day.
It's perfectly legitimate to have a gripe with the 20%. I get it. But, I don't understand how the way the rates and billing amount are displayed or calculated are misleading. It's not "the client is charged 20%" as you said. If you look at it that way it's incorrect and I'm sure it contributes to frustration. It's that the total amount the client is billed has a 20% fee deducted by Upwork. The fee doesn't come out of the client's account, it comes out of the freelancer's, so it makes sense that the freelancer would take the fee into consideration when bidding. Offering a different perspective because I can see how looking at the 20% as something that is charged to the client could color anyone's opinion of the rate structure.
The real question is how do you benefit from Upwork. In other words, in order to earn the same net income without Upwork, how much would ou have to spend in client acquisition?
If the figure is lower, then Upwork is a waste of your time and money.
As for the fee hike, I still don't know whether it's a good thing or a bad thing. If it can strangle the low ballers, I'm fine.
I don't blame you if you are frustrated by some of the recent changs.
But I wish people would not refer to Upwork as a "monopoly." Two companies merging into one does not a "monopoly" make. I have a long list of platforms that provide exactly the same service as Upwork. They're not "works in progress". These are currently available, active platforms, many of which have been around for many years.
It's also inaccurate to simply throw around the "20%" fee figure. Most work done on Upwork isn't charged a 20% fee.
Since Upwork changed their fee structure many months ago, most of the work I have done has been charged a 5% fee, for 3 different clients. The work that wasn't charged a 5% fee was charged at a 10% rate, which is the same rate I have been charged since I started working on Upwork.
At your posted rate, you are only charged 20% for the first 6 hours of work you do for a client. After that, the fee is 10%, and eventually 5%.
@Preston I'm happy for you, but I'm in a much different boat as far as the work I get. I survive mostly on smaller one-off jobs, and since the changes have been implemented I've seen my work hours increase while my pay decreases. It hurts, plain and simple.
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