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]

[ Applause ] Thank you Christine for your words of wisdom.

I want to love Upwork and have in the past couple of years sang it's praises. After wading through all the piddly rubbish jobs for asking for the moon on peanuts I managed to find a few gems of clients that I love working with. I paid my dues and the membership and the connect to prove myself worthy and I now have my regular clients that I have appreciatively paid my commission on and stayed on the platform with them because, after all, I found them here. Even when clients have asked we leave to reduce fee cost. So, yes, I do want it to succeed, but don't penalize me for being loyal. Terms of a existing contract should not change. That is the point.

[#3]

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William T C wrote:

Maria,

Investors can long and short a company and use financial instruments called PUTS and CALLS.

Therefore, either financial position can easily be made in seconds.

IMHO Upwork is the best freelancing site and as a freelancer want it to prosper.

What is your opinion on that matter?

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To a good understander, few words are enough.
I think I have already answered you. Not once but several times.

And actually, is this an answer to everything I asked?

[#4]

A lot of people left Upwork when they raised the 10% to 20%, there was a lot of talk about it and Upwork didn't listen. My main customer which has 6 contracts with me at 5% for over 3 years now will simply disappear from upwork and be invoiced directly. There is no point to keep them on here. I would be OK if they change to 10% for all but keep the existing contracts to what they are for ever not for the next 9 months only.

[#5]

Hi Florian,

I agree with you. For existing contracts removing the 5% to 10% will demotivate long-term freelancers on Upwork and they may move to other platforms. 

[#6]

Huh? So 10% freelander fees with 10% client fees equals 20% total fees. What's you point. The world might be a better place without platforms like Upwork where people with dramatically different costs of living are competing with each other. On the IT side we're seeing ridiculously broad bid ranges on top of high proposal submissions (usually over 50) on top of exorbitant Boost bids. Upwork needs to stop gouging and focus on leveling the playing field.

[#7]

Mark,

Client fees are 5% not 10% with the new total 15% not including misc fees.

[#8]

Wanna know how Upwork becomes profitable? Stop spending so much money on advertising. Make the CEO's and higher ups take a paycut - because we all know they're millionaires at this point. Maybe charge CLIENTS for each job/project post?! Upwork seems to pander to the client, which is why 20 percent of the posts you see are either scams, never come to fruition, or eventually disappear without choosing a winner. That's why Upwork needs to charge to post a job. To weed out all the scammers and nonstarters. And... to add to your super important need to be profitable.

Why are we, the freelancers (the ones looking for work) paying for the right to simply apply for things, with no promise that we'll ever get hired? You urge us to apply for jobs all the time yet we are only allowed a certain amount of connects (aka upwork currency) which doesn't even let us apply to a dozen jobs. It's a rigged system and it has always been in the clients' favor. 

I say if you want to make some money, stop charging the little guys! Charge the clients so that you get better clients in general. Charge the clients so that you know they are trustworthy and are not going to scam us. Charge the clients because that will show us, the freelancers AKA the reason your company exists in the first place, that you might actually give a **bleep** about us. I don't know about everyone else on here but I live paycheck to paycheck. And I come on here to hopefully find work so I can get some bills paid. 90% of the time no one ever responds to my proposals, which makes me lose hope in myself and the process. And it doesn't make me want to spend money on more connects or get a premium membership. It hurts my pride and wastes my time. And that isn't just because people aren't choosing me to do the job, it's mostly because the jobs I applied for never actually happened, or the post was taken down. And that is why clients should have to pay or offer up some sort of collateral to put a job posting up. Even a measly dollar could make a huge difference. Because they are usually posting ONE job at a time, right? If they want an awesome freelancer and want people to give them their time and proposals then THEY should pay for that service. Especially if they have no intention of hiring anyone anyways. CHARGE THE CLIENTS TO POST!!! Case solved 🙂

[#9]

Andrea,

Most of those items you listed have already been implemented.

[#10]

Andrea and all freelancers,

No one wants to pay fees, or taxes, but we do because everything has a cost in a free market.

Below is purely an interpretation of what has gone happened based on my knowledge having been a business owner.  Remember, Upwork is not a non-profit, they are a for profit business and therefore exists to make money for their employees and stock holders.

Upwork, previously Elance & oDesk, came about to provide a service that was focused on the gig market versus hiring or temp work.  In a very simplistic view, to compete in this market and gain market share they came up with a pricing strategy to not charge upfront fees but instead collect a percentage of revenue. This approach gave small businesses a way to compete in a very competitive market for talent and just pay for what they needed versus having an employee.

As the platform gained popularity I can see how the busines costs increased from the need for technology to support the increased use to the employees need to run the business. 

So why the sudden change in pricing structure, that is fairly easy to see even without asking Upwork.  The pandemic happened and there was a surge in people discovering that working from home was possible and they enjoyed it.  More businesses realized that there were jobs they could outsource to freelancers.  Both of these led to a surge in both job posts and freelancers joining.  

Given what we know about Upwork financials now, the percentage they were collecting wasn't enough to support the growth they have gone through and most likely because of the number of jobs that never hire and with hourly paying being low.  So, they had to come up with a new pay structure that they felt would keep them profitable and able to continue offering this service to both businesses and freelancers.

As freelancers we may not agree with their choices in how the fees are charged and who pays them, but as long as their are those that are willing to pay them and it is making Upwork profitable the fees will remain.  I can say with confidence that Upwork is not going to change their fee structure unless it becomes unprofitable.

As individuals we do have free will and can choose to go other platforms for freelance work or we can decide to seek out fulltime employment and leave the freelance market.  Freelancing is not for everyone and has become more competitive and it will continue to become more competitive. To compete you will need to do what small business owners have to do, learn to compete by distinguishing yourself from others and continuing adapting in an ever changing marketplace. For some, that means broadening your reach to a wider market utilizing multiple avenues to reach potential clients, and for others that means specializing and finding a niche market where there is less qualified talent to compete against.

It all comes down to your ability to adapt to change.  Vent your frustrations, but once done, take a moment to examine your skills and what motivates you and then come up with a direction that you want to go and focus on getting there.  What I find is that many freelancers do not consider themselves a small business owner, but that is exactly what they are.  It is a different mindest and can be the difference of excelling or struggling to survive.  If you haven't, you may want to look for resources on starting a small business and go through the steps of creating a business plan.  There are a lot of free resources out there that can help.

[#11]

So William, tell me you rather 10% over 5%, you know that most of us work hard to get to the 5% and this is how UpWork is paying back to us, having us go back to 10% and when some one new comes and gets a 10% directly. I think this is not fair, I will request the company to seek another method of payment since this is not fair, your tracking clock always has an issue with connection and makes me work more to get that time lost because even if I sent a report you never to nothing so paying you guys more for not even taking care of this issues, it`s not worth.

[#12]

Mario,

I would rather have 0% fees, but of course that is not possible. Upwork loses money with 5% fees; it's not profitable.

If you experience issues with Upwork's tracking clock, I would report and send screenshots. Typically programmers need detailed information to have the opportunity to address issues.

[#13]

You know quite a lot about company's policy and finances for a "freelancer".**Edited for Community Guidelines**

[#14]

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Michele G wrote:

Yeah, "how do you do, fellow kids".

It's just a guess, but if there are different answers to how the company managed to lose money despite the extra costs that they added for us in the last years, I'll be happy to hear them.

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Upwork and its foundational/predecessor corporations have never been profitable. It commands enough market share and attracts enough revenue to sustain the investment that keeps it afloat (keeps the lights on, and pays at least one eight-figure salary). It got a bump from pandemic remote contracts that seemed to accelerate its long, slow, trajectory toward profitability. That bump did not produce lasting enough growth to continue the arc toward profit. Losses are not surprising.

The question is whether Upwork's current moves will improve revenue enough to keep investors interested—or will losses reach the point where investor confidence evaporates, and Upwork must sell its market share to the highest bidder, as Elance did when it got bought out by oDesk?

[#15]

$900,000/350,  average contract is about $2500. If you want the benefits of a lower rate, try maintaining long term clients with high paying contracts? You are adamantly looking out for yourself at the expense of those of us who worked hard to get our fees to 5% and even if a rate increase would 'even us out'. I am strongly inclined to maintain the integrity of my business model, keep running my business how I've built it and decline to change my business model due to the greed and poor business decision making of a company. The solution is not to raise our fees. I don't even see how a person can support such a power move. They are disrespecting freelancers with the whole 'oh you won't have to calculate fees that are so complicated', give me a break! Every person that chooses to freelance is well versed to calculate fees! Stop the condescending comments. Wrong is wrong no matter how you put it 

[#16]

Dannelly,

From a busines perspective, Upwork needed to standarize the fees to 10% to better manage the company and did.

As a freelancer, we need to Upskill, do outstanding work, and move toward in-demand jobs.

Upwork doesn't OWE any of the freelancers anything. We are not employees.

I have been freelancing for 25 years and can unequivocally state to be success for the longterm one must adapt to the business environment or consider whether they are better suited to become an employee.

[#17]

I wish there was a button where we say, "Actively looking for clients," and if you don't click it, Upwork pulls you from the searches.  Because I see a lot of Freelancers come up in the searches who have not taken on new clients for 6 months up to 2 years. And, if you don't take on a new client, after say 3 months, this button automatically deactivates so that your profile isn't still out there competing against everyone else's, unless you've somehow activated it proving you are indeed looking for new clients. - I know there is a badge, Available Now, but, if you don't select it, you're still found in the searches. And, if you do select it but haven't taken on new clients in the past 3 months, your profile can still be found in the searches.

[#18]

Sherry,

I would have the system automatically remove all freelancers from search after 3 months of not logging into the site. Let the logging into the site be the toggle so everything can be automated.

[#19]

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Sherry M wrote:

I wish there was a button where we say, "Actively looking for clients," and if you don't click it, Upwork pulls you from the searches.  Because I see a lot of Freelancers come up in the searches who have not taken on new clients for 6 months up to 2 years. And, if you don't take on a new client, after say 3 months, this button automatically deactivates so that your profile isn't still out there competing against everyone else's, unless you've somehow activated it proving you are indeed looking for new clients. - I know there is a badge, Available Now, but, if you don't select it, you're still found in the searches. And, if you do select it but haven't taken on new clients in the past 3 months, your profile can still be found in the searches.

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I cannot be in favor of this.
There are many reasons why you may not have captured a client, among others that the jobs that appear are the closest thing to a joke, as is happening lately.

What Upwork should really do is filter freelancers before allowing them to be visible.
Here anyone who is capable of writing a title and a couple of sentences (not very coherent in many cases, if they are not stolen from another profile) and a photo (which is often just a drawing or the photo of someone who does not is the freelancer).
And let's not talk about portfolios, many times stolen.

Upwork is already putting enough obstacles to those of us who have been inside for a long time. The same thing that it cost me to have them accept my profile due to the reviews, Upwork must do the same again. Many profiles would not be here.

[#20]

That feature already exists but its pay to play. if you are not active your profile is converted to private unless you pay for freelancer plus. And there is also new "available now" switch which you can buy for 7 connects per week. These kind of money making shortcuts prevent upwork from becoming a better place for both clients and freelancers unfortunately

[#21]

You could set an example and leave first.

[#22]

when you HQ is in California and you wonder why you do losses.....mmmhhhhh

bleeding money on rent and avocadoo toast?

[#23]

100%

[#24]

Michele,

Actually the shareholders via the intial IPO cash raised paid for these losses not the freelancers.

There are 4 million active freelancers versus 800,000 active clients. IMHO there are TOO many freelancers on Upwork.

As you know, I am a freelancer of this site just as you and am not Upwork.

[#25]

William, 4 million active freelancers is vague information. What does that mean? It could be misleading.

What qualifies as an active FL? Lifetime earnings of $100, and an active fixed-priced contract, with no further activity for 6 months? Is that counted?

Or does active mean FLs with consisten earnings every week/month on an on-going basis? What's the criteria.

Also, in response to Michele G, on him saying people are leaving the platform because of unfavorable circumstances, you opined that most of the 4 million need to leave, and that it is a good thing.

Curious to know if you understand what you're suggesting. In general, when other experienced users complained about the floodgates being opened, they wanted the inexperienced, non-contracted, non-skilled, scamming-type people off the platform. I can understand that.

But, what UW is doing now, will result in losing users from the other end of the spectrum. Experienced people, who were generating income for UW consistently. Are you of the opinion losing these FLs is good for UW as a company and its profits?

EDIT: To add to that, don't you think the new fee structure is actually designed to invite even more FLs to the platform? So in a way users will continue to grow, and will more than likely make-up for the loss of well-established ones. But would that make-up for the loss of revenue? 

[#26]

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William T C wrote:

Michele,

Actually the shareholders via the intial IPO cash raised paid for these losses not the freelancers.

Elance founded on venture capital: 1998

oDesk founded on venture capital: 2003

oDesk acquires Elance, becomes Upwork: 2015

Upwork IPO: 2018

The three enterprises combined, while making sizable revenue and acquiring commanding market share, have relied on other people's money to keep the lights on for 25 years, a mere five of those based on public investment.

Others here have already pointed out that the tiered commission was an Upwork innovation specifically focused on:

• cutting losses in the short-term, one-off contract, "gig" market
• growing its then target market: long-term, repeat business.

Upwork apparently no longer sees the former as costly, or the latter as profitable/desirable. The only long-term, repeat business they seek is in the Enterprise market. The rest of us—from $10 contractors to million-dollar earners—are all little fish swimming, or sinking, in the same turbid, fee-laden, overmanipulated market. This benefits you. It damages others.

Not sure what is the point of your evangelizing. Nothing you say will fix Upwork's longstanding structural and strategic problems. Nothing you say will make those disadvantaged by this change see it as advantageous.

As someone who can never expect any of my clients to reach 10K in contracts, I have no dog in this hunt. I do, however, have a clear sense of where Upwork has been, and am pretty confident I can see where it's going. Whether that strategy works for them, and for us, remains to be seen.