For employers, they will now incur a transaction fee of 2.75% per month, or $25 if they opt into a flat fee structure – where previously there was no fee (the transaction fee being rolled into the 10% deducted from the freelancer’s side).
If this meant more money to freelancers we would strongly support the move, but unfortunately the news is even worse for the most vulnerable users of the platform.
While previously UpWork’s cut of their earnings was a flat 10%, now – for the first $500 – UpWork will help itself to an inexcusable 20%. And there is no benefit at all until they hit an insane – and in most cases practically impossible – $10,000 of earnings with the same client.
And they’re relying on two sensible-sounding rationales for making the change; one, that it costs more to maintain smaller contracts and two, that they want to ‘encourage’ longer-term relationships between employers and freelancers.
We have no sympathy for the first – yes, UpWork generated less – or even no – profit taking 10% out of the middle, but this sector is vital to the viability of the platform overall – it’s the lowest tier that gets the employers in!
But in truth it’s the second reason that really riles us up, because as freelancers know the vast majority of UpWork contracts are not ended by the freelancer at all – but by the employer.
So the practical impact of the changes is not going to be longer relationships between employer and employee as they mutually head towards the promised land of $10,000 of earnings. What does $10,000 look like when you’re on $3 an hour? It looks like two years of full time work.
So no, we’re not about to see more stable contracts or longer contracts or more lucrative contracts for the lowest paid workers on the platform. Instead, you’ll see a small number of primarily Western-based contractors very pleased that their rate has been cut to 5% as part of UpWork’s efforts to ensure they don’t go off-platform, while on the other hand more unscrupulous bosses trying to find ways to recoup their lost $25 a month from their poor, vulnerable employees who have just had their own fees doubled.
“We’re in this together”, the CEO has the gall to say, while reducing the take-home income of UpWork’s poorest and most vulnerable members by 11 per cent overnight.
No, we’re not in this together. UpWork, you are in this to make as much profit as possible from your members, and you will continue to do it until someone else appears and does it better. And if you continue taking your members and your community for granted, that community is not going to stick around for long.