I haven’t been a freelancer for years. At least not in the traditional sense where you start hunting for clients on platforms like TopTal and Upwork.
I was active when it was still called Elance and Odeks, before the acquisition.
Once in a while, I took some jobs on Upwork to balance out my earnings but I deleted my Freelance account years ago.
However, I kept the client account and hired excellent people over the years.
Even though I have not hired anyone anymore for the last couple of years, I bumped into this Reddit thread about Upwork once I finished my free guide about freelancing.
2 mins in, I was shocked by the complaints. 10 mins later I was stunned. 1 hour later I had to find out if Upwork was truly failing or not.
Conclusion: I think Upwork lost its mind.
Browsing through Reddit and Upwork forums was already enough to digest.
Complaints are rising and it seems Upwork is caring less about the sell side than the buy side.
For years I have defended a platform like Upwork to be a viable solution for beginning and experienced freelancers but I am going to retract that.
Pay To Win
Upwork, despite its success, was never profitable and operated for a decade at a loss each year.
So a shift was required in order to make the platform survive, but I am pretty sure the entire management team is high on cocaine or drunk during their meetings.
I suspected as much once they started adding subscription models for clients but I would never think they would start killing the freelance side at this pace.
- Freelancers need to buy connects before applying any job
- The amount of connects varies per job
- Freelancers pay a commission to Upwork (10%-5%) on total earnings per client which is absurd. Imagine you made $100 and you’re getting $90 paid out.
I can understand to a level that connects prevent spammers applying for jobs so clients/companies are not overloaded by junk offers.
But taking away 10% of hard earned money from a freelancer unless they meet a certain threshold is ridiculous.
Okay, let’s assume we can live with that, then here’s where I start to feel Upwork is using ”unethical” practices that impact the sell side (freelancers)
At least that’s how freelancers feel. Being cheated out of money even when they spend hundreds of dollars on connects to boost their profile and not get a single interview. Let alone a response.
Some get discouraged, leave Upwork and Upwork is not going to care. Because they already spent $$$ on their platform and a new wave of freelancers will just enter the scene within a nanosecond.
And they know it. Why would they care when there’s an overkill in freelancers?
Let me remind you that there are in 2024 over 1.6 billion people doing freelance work. Which is an astounding number.
Ecosystem & Bottom Race
But fine, let’s assume you still get a hold of a potential client in an interview. You will most likely get rejected. Not because you’re not skilled enough, but someone else with the same qualifications dropped their rate 10X.
Not so long ago, I was reading on Upwork that someone was:
- Looking for a video editor
- Was willing to pay $100 per 20 minutes
- Got offers as low as $5
- Was excited that the quality was as expected
- Started bragging about it on Reddit
Do you see where the problem is?
If clients were able to get it for $5 this time, what stops them from posting a job at the same rates instead of $100 and find again someone that can do the work?
Completely devaluing the market and skills from those who deserve a much higher rate.
What’s problematic is that when cheap offerings start to undermine the entire market, panic kicks in and they have to follow suit by dropping their rates which turns into a race to the bottom to even get a job.
Now this ripple effect blasts through employers too. When they see the averages offered for a specific job or skill is lower than expected, they aren’t going to offer 10x more because of goodwill.
That in turn affects your winrate in closing a job/contract.
Because… that’s right. You ought to spend connects in volumes since the job market is desperate.
I read stories where some people spent over $500 in a month with zero success.
The freelance market is already brutal where thin edges can make or break your year. But Upwork is taking away the thin edges.
Double Edging By Upwork
Not only are they charging the freelancer but I remember a time Upwork was charging a % based fee based on the total amount.
Now they charge $10 to initiate a contract.
I don’t know how to feel about that.
If you have a smaller task for let’s say $50 then you have to add 10% on top just to get the contract.
Then apparently there is now an “instant connection fee” that’s about $5.
Like what the fuck is going on?
Count in conversion, currency discrepancies, possible credit card fees and you end up paying $70 instead of $50.
Ofcourse, when someone posts a $1000 dollar job, then $10 is only 1% and has a lesser impact.
But when you’re a power user, those $10 fees add up.
Now, I am not sure if this is on a sliding scale and smaller contracts are charged less, but it is still a horrible approach by Upwork.
I understand that they have to keep scam clients and fake clients from the platform and the biggest blocker is currently charging those fees.
But those with bad intentions, always find a loophole.
Ever since this came into effect, there was a surge of “real clients” that interviewed plenty of freelancers with an “extensive screening” and some “tests”.
What really happened?
They basically let them do the work for free without ever paying a dime through “job interviews and tests”.
Many new freelancers are just getting duped by those practices and the fake client gets away with murder yet again.
Upwork Is A Dumpster Fire?
I start to feel sorry for those that are trying their luck in freelancing.
- Those in lower-tier countries with little to no money have no shot in succeeding.
- Those who can afford connects and keep spending get disappointed since the client never even opened their application
- You operate at a loss from day 1
- You get shafted by lowball offers, forcing you to lower your desired rates
- Client expectations go up, whilst your earnings decrease
- Upwork takes money from both sides, and somehow manages to fuck up 24/7
Is there even a way to fix this?
In what world are we living when job opportunities become paid to win with even fewer chances than when I was freelancing 15 years ago?
There are only 841K active clients at the moment on Upwork, with over 18 MILLION freelancers looking for a job.
The ratio is abysmal.
If Upwork was more efficient for clients, and more secure, it would attract more companies.
I am thinking that Upwork is starting to betray their DNA and because of all the losses, they are getting pressured by shareholders and debtors.
Whilst that is just speculation, I cannot be too far off here.
Can Upwork Fix This?
I think they’re too deep. And the damage is done. But since freelancers come and go, I don’t think they care so much. In 10 years from now, there will still be freelancing and old gen moves out to pave the way for a new gen.
I really think they lost their mind and are setting themselves up for failure.
It’s time for a new player.
I know many have tried, and failed and Upwork seems to have the upperhand. (Fiverr and Freelancer isn’t any better)
Maybe a platform that is fair and has a much tighter approval process on client and freelance side.
I have considered building my own simple straightforward job board/ freelance platform. And after reading into Upwork’s failures and mess, I am more inclined to pursue that.
Key points would be:
- Stricter assessment process
- Due diligence on companies
- Lesser fees/commissions
- Min hourly rate $10/hour so lowballing is out of the question
I think if I can embed those elements, I might have a shot serving a niche market.
Who knows?
I will let you know if I plan on doing this.