Announcing new, simpler fees on Upwork

[#1]

Today we introduced two key pricing changes: on May 3, 2023, we are retiring our sliding scale fee structure and introducing a 10% service fee for all freelancers, and on April 26, 2023, we are implementing a one-time contract initiation fee for clients of up to $4.95 per contract. Click here for the full announcement.

Please share your questions and feedback in the thread below.

[#2]

Upwork, the primary value you provide as a platform is in the handshake between freelancer and client. Therefore, I believe that the initial higher rate is reasonable. The value of this handshake is huge. The mechanism to bid, communicate, negotiate, form contracts, and provide reviews is very helpful to a freelancer of any size to form new relationships. 

However, as a freelancer builds a long-term relationship with a client the value Upwork provides to that relationship is no longer about the handshake, communication, or reviews at all. The value Upwork provides on a long-term relationship is reduced to the transactional value of your payment services. The freelancer does all of the rest to maintain and grow this relationship, from which Upwork is rewarded. This payment service has value, but a look at the market of payment services shows that 5% is a reasonable fee for such services. 

The result of this move will be that many top talent and highly paid freelancers with long-term relationships (your cash cows) will look to take their mooing cows to greener pastures at every opportunity. Without beef you'll be reduced to foraging for smaller, less rewarding meals. This feels like a slow starvation diet for your investors. 

Enjoy your protein rich crickets. 

[#3]

Lane,

If 5% fees were losing Upwork money, how will they be hurt again?

All that will happen is that freelancers will lose many of the clients they attempt to take off the site. Especially since there are 100 other Upwork freelancers ready to do the work for 10%.

Remember the client's fee of 5% didn't change.

[#4]

You make a good point here William, however, I think we're discounting the fact that freelancers may not end up losing the client. It may not even be a one-sided affair, where freelancers are requesting clients to go off platform.

The clients would be saving their side of the 5% fee they pay to UW, plus they might not feel comfortable restarting a relationship with a new contractor, after having built trust and rapport with their freelancer.

In any case, it remains to be seen what the fall-out of this decision is. It could go different ways.

[#5]

Bilal,

Agreed that it's going to go in many directions depending on each individual situation.

I am countering the freelancers that think everything is now going off site.

Which is extremely dubious.

[#6]

When there have been changes in the past, there's been a lot of noise about taking things offsite. The different though in the past is that usually the people making the noise have no other choice than to suck it up. They may be people who have never had a job on Upwork to begin with and for example, are bitching about having to pay for connects to get a job.

Those of us who have established long term, mutually beneficial and trusting relatioships with our clients can easily walk away from here. It's not a matter of idle threats with no consequences. We know that our relationship is more than a payment transaction or a client-freelancer matching service. It's gone way beyond that by now.

[#7]

• Hello, I want to ask, if my client has created milestones and money in escrow reached above 10000 usd, but I am able to complete the milestones upto 9500 usd till 3rd may, so, will I get my 5 percent deduction from may onwards or not.  The client has provided amount of say, 10100 usd, but I could yet take 9500 usd till 3rd may, and 501 still in escrow. Will i be able to counted among 5 percent with this client or not?
• kindly reply

[#8]

Hi Harshi,

Thank you for reaching out to us. The 5% service fee for projects that reached $10k will not be removed until the end of this year. So if you have earned more than $10k on a project, you're still eligible for a reduced fee of up to 5% through the end of this year.

**Edited to add:**

You should meet that threshold before May 3 in order to be moved to the 5% service fee.

[#9]

Annie,

How hard is this to understand.

No one on the forum sees the 5% until Dec. as a discount. Everyone sees the 5% -> 10% as an increase in cost; what it is.

The large customers (those paying more than 10k) should carry the cost. Now the freelancers, have to explain to the client that Upwork is making loss and we have, for that reason, increase our fees

[#10]

Thanks Annie for the reply. Yes, I undertstand 5% service fee for projects that reached $10k will not be removed until the end of this year. But, my query is, my client has created milestones that cross 10000 usd (money in escrow by client), but I am not able to complete those ones by 2nd may till 9500usd , will i get 5 percent or will I be stuck at 10 percent only. So, the money is escrow would be more than 10000usd but client billings will show 9500 usd, so will I be considered under 5 percent till end of year with this client or not

[#11]

Hi Harshi, 

The fee will be based on the amount that will have been invoiced before or on/after May 3. But let me have one of our support agents reach out to you directly on a ticket and discuss a specific contract you're referring to as we can't discuss those details here publicly. 

[#12]

Let's not beat around the bush. The saying goes, those who push for change are welcomed by those who benefit and resisted by those who lose out. With $900k in revenue and around 350 jobs done (that's averaging out to $2500 per job, and never hitting the $10k mark as you've admitted), it's pretty obvious that you stand to gain a lot from this change. So it's no surprise that you're advocating for it. But let's be real here, there are people who are going to see this as a 100% increase in their fees, while for you it's a 30% decrease. It's unfair and you know it. You can admit that you want the change to stick, but at least be honest about your motivations

[#13]

Angel,

I have been a freelancer for 25 years and my individual clients have ranged from $200 to $2,000,000 each.

One thing that I have learned is business changes and the freelancers that adapt always win.

Change your strategies accordingly if one is a freelancer. Don't change if one is an employee.

Do you really think I am excited about saving a few thousand dollars per year on one of 4 sites that I have performed 7 to 8 figures each on? Don't think so.

I am attempting to help the true freelancers that want to be successful on Upwork. Upwork is my lowest performing freelancing site, however it has the greatest potential in my opinion for the longterm.

[#14]

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@williamtcooper wrote:

Upwork is my lowest performing freelancing site

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Wait, what?

[#15]

Jonathan,

Because I have been freelancing for 25 years, I have seen just about everything under the sun. During those 25 years, I have worked with 2,000+ clients one-on-one. It's why I can be so direct on how things work from a business perspective.

I have always adapted, Upskilled, and am extremely conscientious and diligent.

I hope to encourage and assist those on this thread, but only if they are willing to adapt their thinking patterns.

[#16]

William,

I think that as freelancers, we all have to constantly adapt, find new ways to improve our services and make our client experience the best it can be. We constantly think about this, but it's also important that you don't get pigeonholed in your own way of thinking because it is pertinent to your sector. Other business sectors are very different from yours and require incredible focus and competence. They have different demands from clients, and in many cases we're not just offering $200/ 60 min consultations. Our bread and butter comes from a resilient business attitude with long-term clients who invariably tip us into that 5% bracket, so from our perspective i.e. the people who are actually affected by it, I am sure you can understand the concerns and I would venture a challenge for you to propose a solution rather then just reverting to us all taking on the chin and accepting it. I'm looking forward to your thoughts on this .

[#17]

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Jonathan L wrote:

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@williamtcooper wrote:

Upwork is my lowest performing freelancing site

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Wait, what?

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And yet he directs all of his clients to hire him here, and not one on of the higher-performing websites. Makes total sense.

[#18]

You haven't had 1 contract over $10k on Upwork in the last 3 years at least. I checked. Why are you so active here then? 

[#19]

Andra,

I have completed 350 projects for $900,000 in the past five years including 35 Consultations / Projects this year.

I am here because of my passion for helping others and I appreciate this site.

Hopefully a few freelancers will understand that a 5% fee is causing Upwork to LOSE money and is unsustainable.

Freelancers should instead focus on Upskilling, learning in-demand Skills, performing outstanding client work, and other activities to continue to grow as a freelancer. By doing so clients will gladly pay them more per hour.

Freelancers can have concerns, be upset in the shortterm, but at the end of the day will need to get back to freelancing or consider becoming an employee.

[#20]

Shouldn't you compare yourself to Companies/Agencies instead of individual freelancers since you seem to have a team supporting you?

[#21]

UpWork does not LOSE money, since the whole process STARTED with 20% and then went on for quite a while for 10%, before it lowered its fee to 5%. Do the math. They made enough money from each client-freelancer relation to keep their platform floating quite nicely.
For small people like me - this is a huge blow!! I am already working plenty of hours and I love my job as it is, so I will kindly decline your demand for having to grow and learn more to create more business blablabla (from one of your other comments). For people like us, who only make a small living, this is a kick in the gut and it will definitely hurt - once they change the 5% fee back to 10%! 

[#22]

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Sandra G wrote:

UpWork does not LOSE money, since the whole process STARTED with 20% and then went on for quite a while for 10%, before it lowered its fee to 5%. Do the math. They made enough money from each client-freelancer relation to keep their platform floating quite nicely....

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Upwork does lose money. It has never made a profit. Elance never made a profit. oDesk never made a profit. Upwork is not kept afloat solely by its large revenues; those revenues are large enough to attract enough investor money to keep it afloat. This state of affairs is sustainable for a very long time—see Amazon—but is subject to collapse if investor confidence dries up.

[#23]

Because we long-term contractors are embedded closely in our clients' companies, and if they lose us, they lose our knowledge, relationships with their clients and other contractors, etc. If we are really giving our clients' value, then we aren't so easily expendable as you might be. Many of the companies hiring on here are small businesses and if we contractors suddenly ended our working relationship with them, they would be in deep trouble picking up the pieces.

Now it's a whole different matter in your line of work where you go in and do some advising for a couple hours and jump out again. That person could have just as well hired someone else and gotten as good or better advice.

[#24]

Nicole,

A few large clients is an employee if they go offsite not a freelancer so we will see.

[#25]

Everyone, never mind what William is saying. One can have a contractor relationship with a client without Upwork in the middle. Going off the platform isn't going to magically transform you into an employee. And so what if someone left Upwork to become an employee of a company? If the company and you agree on that and follow the conditions of employment, who are you to say that's wrong?

[#26]

Incorrect William.  

As an employer in California, I need to know the rules of AB5, and you can use freelancers without making them employees, you just need to follow their terms and the freelancers need to establish themselves as a freelancer.  No platform needed.

As a freelancer, I have clients outside of Upwork, large and small and I am not considered an employee.  It is just a matter of establishing yourself as a sole proprietor.  It is not hard to do.  You do need to show you are available and seek employment from multiple businesses, but that it what being a freelancer is all about.