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Comment by desaiguddu | Hacker News Reader

IMHO, most of the Upwork jobs are upwards of $1000 if it's a serious client.

A large number of freelancers & agencies have built a stable clients on Upwork from years together. It will be a little revenue shock for them. Or eventually clients will pay more to cover the costs.

Let's assume you are a freelancer with a client relationship of 40k

* 20% fee for the first $500 earned from a client - $100

* 10% fee between $500 and $10,000 earned - $ 950

* 5% fee after the first $10,000 earned - $ 1500

New model - 40k

Am I missing anything here?

* 10% fee of any amount - $ 4000

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Yeah, a lifetime 10% just for making the introduction is pure exploitation. On the buyer side we have been defrauded by Upwork providers and the company did absolutely nothing. Clear cut case of illegal activity and ToS violation, Upwork did nothing other than take our money. The FTC needs to beat this gang of criminals into the ground. They are a racket from top to bottom. Fraud shouldn't pay. Exploitation of workers shouldn't pay. Breaking the law shouldn't pay.

I don't know, it seems like an impossible market for an honest middle man to me. 10% of short term contracting being a total bust where a worker should none-the-less be paid seems like a cost companies had that dealt with the lowest of job agencies. If those job agencies could afford to reimburse its because they were taking 50%.

Lifetime, in theory. In practice, you can move the relationship off Upwork after 2 years.

See https://support.upwork.com/hc/en-us/articles/360043210654-Mo...

Has anyone paid this fee? I think when it gets to the point of dropping 12% of a freelancer's annual income to just talk outside of the platform it's simply not worth it.

If you wait two years per grandparent's post, the fee is only $1, which probably is worth it.

If you want to convert sooner, it's a percentage of the income for that specific client/freelancer relationship, and not total work for the freelancer. So it is probably a more palatable amount, assuming the freelancer has multiple clients.

Yeah but the fee is calculated as a percentage of a full time (2080 hour) year. So it's only worthwhile if you're being hired fulltime, near full time, or at a much higher rate than your existing upwork rate.

> Taking a relationship outside of Upwork without first paying the Conversion Fee is a serious violation of the our Terms of Service.

This sounds like something a pimp or a mob boss would say.

It's hard to find any important difference between the two.

Have you filed your concerns with the FTC? Have you contacted your congress person?

These seem like real concerns and failures of the market. I know Upwork has strong network effects, so this seems like a justified government intervention

Upwork contractors reside in many different jurisdictions around the world so I won't even trying guessing the legalities. Certainly they are breaking the law somewhere. However, one thing is certain: there is a very strong incentive to not look for long term contracts on Upwork.

That incentive always was there, but it was small. It isn't small any longer. The trajectory makes one wonder what this fee will be in another year or two. Clearly they won't be lowering it.

Upwork is not an independently sustainable company. Upwork shares are worth less than at their 2018 IPO. They've never really been profitable. They rarely have a positive free cash flow. They've increased outstanding share count 26%. The things they've done only reduced the value customers receive from them (like when they decided to charge extra money to view contractor reports.)

How did they never make any money? Companies spend billions of dollars a year on recruiting. This isn't a tiny market. Someone grossly mismanaged Upwork -- for their customers, for their contractors, and their shareholders.

I've hired people with Upwork a few times and I just hire them for a single job and if I'm happy with it. I move to whatsapp and pay via revolut. Everyone seems happy besides upwork to me. lol

True, your figures seem correct.

I guess the problem is that I haven't had any luck finding any serious client, due to the competition and race-to-the-bottom.

Some clients want quality, of course, but in this economy if it's a lottery to find a job in the real world, it's a lottery for those billing upwards of $100/h on Upwork.

So what's left is small contracts where being a seasoned expert to deal with emergencies is more important than being cheap.

In general, you're probably an at least somewhat known quantity for clients that aren't especially price-sensitive (so bill in the $100s/hr range) or you're a name in a hat along with a bunch of people who will just take anything they can get. The middle-ground seems like a difficult place to be.

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