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StanG
Community Manager
Community Manager

Announcing new, simpler fees on Upwork

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.

2,013 REPLIES 2,013

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.

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.


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.


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.

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

You could set an example and leave first.

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

bleeding money on rent and avocadoo toast?

100%

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.

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? 


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 usโ€”from $10 contractors to million-dollar earnersโ€”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.

 

Douglas,

 

I would hope this along with other strategies moves the needle in the proper direction. We will see.


Douglas Michael M wrote:
... The only long-term, repeat business they seek is in the Enterprise market. The rest of usโ€”from $10 contractors to million-dollar earnersโ€”are all little fish swimming, or sinking, in the same turbid, fee-laden, overmanipulated market...

My thought exactly - Upwork's targeting the big Enterprise clients.

Freelancing on Upwork is not free anymore.

I agree it not fair to us long timers. Upwork added so many fees with connects etc. Enough is enough.

 

The only option we have is to move on or eat the fees.

Cut the excessive CEO bonus first to salvage some revenue. I mean us Freelancers are doing all the work so they can have these bonuses and now we are being penalized?

 

No thanks! The should have just kept the long timers at 5% and for everyone new joing it can be at 10%. No one in this economic climate will agree to have more mobey pulled from their income. I know I'm not and will speak to my client about going out of Upwork as I have been with them 2 + years I am sure we can come to an agreement.

Which is a better marketplace?

It's not a fee cut. It's leaving the fee the same for the people who bring them the most money. 

Cindy,

 

I have produced $900,000 in sales in the past five years on Upwork and will save $3,000 annually with this change.

 

However, there are millions of freelancers that will benefit from their fees dropping from 20% to 10% versus thousands that don't.

William T you are single handly the only one person defending this move. I don't see how raising fees decreases costs for us freelancers. You mentioned in another post that 'we can raise our rates, since we've been giving excellent work, the companies will pay'. You are suggesting that we penalize our clients for poor decision making in the part of Upwork. Just saw another thread, the CEO makes $34M, that alone is half of what they claim they lost last year, and at what cost? Fees will increase to keep their C level executives rich, nothing else. Increasing fees does not lower costs, no matter how you put it. 

Dannelly,

 

Do I believe the freelancers have a right and concern to voice their opinion to a large change that greatly affects them - You Bet! Frequently there are different ways to solve a business issue, but not always where everyone is going to be happy all the time.

 

I know that few of the freelancers have a Technology Financial Analyst background - I do at the highest corporate levels, therefore in my opinion know it's time for everyone to adapt because Upwork can't continue to lose money and still be in business.

 

Upwork's gross margins were 16% in 2022 and probably will need to become higher to become profitable. 5% freelancer + 5% client fees = 10% fees which is not sustainable which contributes to the loss.

 

The main officers of Upwork DON'T get salaries reported above. It is a common practice to attract talent in Silicon Valley technology companies offer stock options. When we see numbers reported that high, it's almost exclusively the exercising of those stock options not salary therefore doesn't contribute to the $89 million loss.

William T C, 
I wouldn't be that mad about the flat 10% if the marketplace was at least maintained properly (i am talking from technical POV). For one i have been here since oDesk time where the fee was flat 10% too! The sad truth is that in the last 5 years Upworks UI/UX haven't improved at all! The site looks lilke it was designed in late 2000s not 2023! Just look at how much more responsive and clean Fiver is. Not to mention the "skills" and categories we have to use are utter nonsense and even LinkedIn has much more sensible user profile structure. So that 10% is not worth just for having a time tracker and escrow, if the marketplace is unusable for both clients that are not having separate budget for talent scounting or freelancers working under agency.
FFS Upwork can't even verify if the client has valid EU VAT ID until I bid and ask him myself! That has potential another 20% expence for me. 

Radoslav,

 

I agree the site has had technical issues.

 

My best guess is that different parts of the site are being managed off of different computer and software systems because the site frequently doesn't update properly - poor integration. Without knowing the internals of this part of the company, it's hard to guess whether the programmers don't have the tools and staff to accomplish their tasks or they are not sure how to solve these issues.

Many of the clients that I have on the platform I actually brought in cause I wanted the benefits of services offered and knowing that if I work well with them I will get 5% and also get reference in the proccess which is important to ger other clients that I dont bring myself. All those clients offered to pay me directy but I refused asking them to pay me over Upwork. I would have no reason anymore to do that because the initial high fee that I paid for first 10000 USD now continues to be high so I am no longer motivated to bring anyone over Upwork nor to keep getting paid by my longterm existing clients. 95% of money charged over Upwork I negotiated outside of the platform and agreed to pay through it. So why would I continue to do that?

In my opinion it is just making the platform more attractive to small jobs.

 

I don't know their ratio, probably there are more small jobs, than high paid jobs, but this change affects all the high paid jobs and procentage wise - I'm not sure it's a good decision since 1 of my hours equals to 10 small jobs, and I work a bit over 60h/week - so if I leave, they will lose the same as about about 500 small jobs in 1 week alone. 

Hi Williams

Please explain how this new rate will be a saving for those of us who have had clients for over 2 years. This new rate will be a financial loss for us

If you currently earn 50000 annually at the current rate of 5% your fee is $2500.

At the new 10% rate your fees will be $ 5000.00.

Andre,

 

You are 100% right that it is a loss for freelancers in your example.

 

However, it has been a loss for Upwork to keep the fee at 5% when they need to be at least 10% or higher to pay for corporate overhead. 5% fees have been a loss leader which no longer can be afforded.

Loss leader? They're a 10 year old company. That's not a loss leader, that's having to claw back after bad business decisions. Over expansion in the bureaucracy? It certainly means that grow has stalled or else upwork wouldn't have to reach backwards to take from established contracts. **Edited for Community Guidelines**

How could you loose $89 million with 20%-10% fees? Doesn't sound right.

Roman,

 

Whether right or wrong it is where the company is at this moment and they are only adjusting to move in the proper direction.

Maybe they should advertise less on TV instead of upping fees for loyal providers who keep long-term, satisfied clients coming back to the platform.

I have been saying tyhis for the past 2 years. Upwork is on track to implode financialy and in general practice.

If Upwork lost $89M last year even with their outrageously high fees already in place (remember: both contractors and clients pay those fees) then the company has way too much overhead.

The revenue of Upwork doubled in the 2018 - 2021.
It's all business. What to invest, where to invest, the stock price and so on.
Ok, so to reduce the % that Upwork takes from me back to 5% I might move to Wise.com payments for 50% of my clients. 
The actual fee is not 5% or 10% bacause VAT for my country adds 19% of the fee the actual fee now is 6% and 12%.
If Upwork wants to bring talents and clients there is a limited grow ammount and if you press down on the talents/clients good luck.

I'm in South Africa.  I regularly get about 60% of the fee in my bank account.   Upwork charges, Paypal Charges, bank exchange rates and fees and other charges all take a savage bite.  Then the local taxman wants 40% of whatever is left.   Freelance, my sainted buttocks, I'm not working for myself, but for all these other folk with their hands in my pockets.

 


Iain R wrote:

I'm in South Africa.  I regularly get about 60% of the fee in my bank account.   Upwork charges, Paypal Charges, bank exchange rates and fees and other charges all take a savage bite.  Then the local taxman wants 40% of whatever is left.   Freelance, my sainted buttocks, I'm not working for myself, but for all these other folk with their hands in my pockets.

 


You can try Wise (formerly Transferwise)

Upwork lost $89m last year b/c they started running advertisements during the Super Bowl and other big events. So now the freelancer gets to burden that absurd expenditure. Not to mention those of us at 5% that already paid in at the 20 and 10 levels. It's literal thievery. No one can convince me otherwise. 

Yes Yes 

I'm with you on this. Why crucify the freelancers who've brought in a lot of income for Upwork as well. 

So you think it's a great idea to punish those who have formed long-term relationships with clients? This is stealing from those who are more successful to give to those who only have one-off or low-paying contracts. If Upwork wants to help those freelancers, then lower the 20% down to 10%, but don't raise the 5% to 10% for those of us with long-term clients. It's literally a 5% across-the-board pay decrease for some of us. 

 

Simply remove the 20% fee and make it 10%. What's so complicated?! They are just getting greedy. In 2 years as a single freelancer they got more than $20.000 from the money I made. And there are thousands like myself. 

And why charge the workers instead of the companies?! Never heard of such a business plan. Everywhere, the one who makes the profit pays, not the workers. 

He previously answered that the cut isn't possible because "Upwork needs to be profitable". But if they need more money so much, why don't they bring the minimum hourly pay to tates that wouldn't be illegal in their country? Or do they need to allow for digital exploitation to be profitable?

actually, once you make money form the platform they make you add a tax number, for my country at least, I'm not aware of different policies in different countries. 

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