Upwork
Graphic Design Writing Other Freelance
Largest English-speaking freelance marketplace, with workers in many countries all over the world. Formed in 2013 after merger of Elance and oDesk.
Terms of Service
Rejection:positive rating Change:negative rating Warranty:positive rating Client Contact:positive rating Worker Contact:positive rating
Rejection:positive rating
Change:negative rating
Warranty:positive rating
Client Contact:positive rating
Rejection:positive rating
Platform Overview
Upwork is the largest English-speaking freelance marketplace. Acting as a mediator between freelancers and clients, Upwork provides multiple services from a basic job board, to payment guarantees for freelancers and fully-featured recruiting and staffing for clients.
The Upwork homepage advertises the ability to connect with freelancers who are: web developers, mobile developers, designers & creatives, writers, virtual assistants, customer service agents, sales & marketing experts, and accountants & consultants[1].
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Platform History
Upwork was formed in 2013 as the result of a merger between Elance, founded 1999, and oDesk, founded 2003.[2]. The joint company, “Elance-oDesk,” was renamed Upwork at the end of 2014.
Combined, they form the largest English-speaking freelance marketplace. Upwork’s headquarters is in Mountain View, California, USA. As of 2017 the CEO is Stephane Kasriel. At the end of 2014, management reported that freelancers had earned USD 941 million over the platform that year.[3]
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Business Model
Upwork charges set fees to both freelancers and clients/employers.
Fees for Freelancers
Upwork charges freelancers a service fee that ranges from 5%-20% of the amount they bill to clients. The rate is determined by their lifetime billing history with that client. Current rates (as of April 2017) are:
- 20% for the first $500 billed with the client
- 10% for lifetime billings with the client between $500.01 and $10,000
- 5% for lifetime billings with the client that exceed $10,000[4]
Services for Clients
Clients hiring freelancers through the basic Upwork marketplace pay only a 2.75% payment processing fee.
Upwork also offers two additional paid tiers of service for clients:[5]
- Upwork Pro: “Premium talent, pre-vetted and handpicked for you.”
- Upwork Enterprise: “End-to-end Freelancer Management System.”
Clients hiring freelancers through Upwork Pro pay the payment processing fee in addition to a service fee for the Pro service. Pro service fees are not listed on the Upwork website, but according to research by M&L Communication Marketing GmbH, costs approximately $500 per project.
Upwork Enterprise fees are not readily available for review.
Payroll services
In addition to these service tiers, Upwork will act as a staffing agency to be the employer of record for W-2 based workers in the United States (formal employees, not independent contractors). For this service, Upwork changes the rate at which they take money out of the total price of a job. Although this is a service offered for the benefit of businesses (who otherwise would be legally required to themselves be the employer of record), the payment is taken out of the total amount negotiated between the client and worker, and is justified in terms of how it will not affect the freelancer’s after-tax pay. So, it is somewhat unclear as to whether it is a fee best understood as charged to the client or the worker.
The cost of hiring a worker through Upwork Payroll is less than what you would typically pay a staffing agency. 23% of the rate you pay is divided for fees (10% Upwork + 13% payrolling costs), and the employee receives the remaining 77%. This does not include any payment processing fees that may apply. The payrolling costs are comparable to what the employee would pay in self-employment taxes as an independent contractor, so the net after-tax impact to the employee is negligible in most cases.[6]
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Worker Classification
United States-based clients can hire US-based workers as employees via “Upwork Payroll.” In this case, workers are employees of a third-party staffing vendor.[7] Most workers on the platform however work as independent contractors. For US-based independent contractors, Upwork is a “third party settlement organization” and handles all 1099 paperwork, if applicable.[8]
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Jobs and Clients
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Work Process
Upwork offers three models customers can use to work with freelancers: Upwork, Upwork Pro, and Upwork Enterprise.
The basic “Upwork” plan is a “plain and simple” way to find freelancers. Upwork Pro offers access to a database of “hand-picked” freelancers, dedicated support, and a few extra software tools (for example, accounting software) and payment protection. Access to Upwork Pro costs approximately USD 500 per project search in addition to the platform-wide 10% commission. Upwork Enterprise offers a “complete” and sophisticated management system through which large enterprises can manage their relationships with many freelancers. Multinational corporations such as Unilever, Amazon, and Panasonic are listed among the users of Upwork Enterprise.
A customer in search of a freelancer can post a job to the Upwork platform without advertising directly to any specific freelancers; they can invite freelancers to such a job once it is posted; or they can invite a freelancer to work directly without posting a job publicly. Job postings describe work and budget as well as potentially relevant skills. Freelancers can make offers in response to posted jobs. Customers can look at freelancers’ profiles, including qualifications, past work they have completed over the platform, and reviews or evaluations left by past customers. They can contact freelancers through messages and/or invite them to Skype or video interviews.
Once a freelancer is found, the terms of the project, including work to be delivered, timeline, and budget, are agreed upon between the freelancer and the customer. Once the project is completed, the customer can submit an evaluation of the freelancer’s work, which will appear on the freelancer’s public profile.
Upwork offers freelancers an app for iOS and Android, through which they can receive real-time notifications of work meeting specific criteria of interest to them.
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This information was collected from 25-100 verified workers on the platform in 2016 and 2017. More information
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Pay
Hourly Wages MINIMUM: €3.94 MAXIMUM: €26.32 AVERAGE: €12.81 MEDIAN: €12.91 Payment Overview
Compared to other crowdwork platforms, the pay on Upwork is quite high, with most workers in our survey earning at least a German minimum wage (€8.85/hour as of January 2017). However, given the kind of work performed on the platform — graphic design, computer programming, translation — wages for work conducted through Upwork are comparatively low for their industries.
Some workers did report receiving significant bonuses in addition to their negotiated pay for a particular contract. These bonuses are included in the hourly wage calculations reported on this page.
Hourly wage calculations also take into account the fees upwork charges for mediating the client-freelancer relationship.
Hourly Wages
As with any freelance work, we would expect pay rates to be higher for freelancers than the rate for similar work under traditional employment conditions. Workers have to absorb this time cost to find new work, to supply all their own materials and tools, to absorb the cost of vacation and sick days, and to provide themselves with all of their own benefits.
Yet, half of survey respondents reported making less than €13/hour while actively working on tasks such as graphic design and computer programming. In general, most respondents commented that their work on the platform paid less than comparable work that they did off the platform.
Hourly Wage Distribution
Percentage of survey respondents whose hourly wages fell into each category
Because the platform is centered on larger-scale freelance projects, once workers secured an agreement with a client, they could have several hours, days, or more work to do before they had to look for a new project again. However, workers still spent a significant percentage of their time looking for work on the platform.
For every six hours spent actively working, most survey respondents spent about an hour looking for work. If this time were taken into account, wages would be somewhat lower.
Nonpayment experiences
18.18% of survey respondents have experienced non-payment at least once
About a fifth of respondents experienced nonpayment at least once while working on the platform, although it was generally a rare occurrence, with only a very small number of workers experiencing nonpayment more than one time.
Frequency of Nonpayment Experiences
Upwork Fee Increases
In addition, many workers were unhappy with recent fee increases by the platform. Although the platform used to take only a 10% cut of the pay agreed upon by a freelancer and client, the platform recently started taking a 20% cut of any jobs that paid out under $500. [11]
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Communication
In general, workers had positive experiences communicating with Upwork management, clients, and other workers.
Communicating with management
Nearly two thirds of workers in our survey had experience communicating with management on the platform. Although few workers left detailed comments about hte experience, almost all reported that management responses to their queries were usually prompt, respectful, and useful.
In particular, one worker was especially appreciative of the “Upwork ambassaddors” program, which gave them a local contact for communicating feedback or concerns up to the platform management.
Being top rated and part of the local community I’ve just mentioned, I can bring any extraordinary issues to Upwork’s ambassador and she will forward them to Upwork operators/management.
Percentage of respondents who said that communication with management is...
Communicating with clients
A vast majority of workers had experience communicating with clients through the platform, and generally had good experiences with the clients themselves.
However, some workers complained about the platform’s messaging features, saying that they were difficult to use, and several workers mentioned communicating directly with clients via email or Skype outside of the official platform itself.
Percentage of respondents who said that communication with clients is...
Communicating with other workers
Just under a third of workers reported communicating directly with other workers via the platform itself. Of these, most had positive experiences.
Percentage of respondents who said that communication with other workers through the official platform is...
Many more workers used external media for communicating with other workers — including WhatsApp, Facebook, Telegram, Skype, and email. A few survey respondents also reported meeeting up in person with other workers, often through officially-organized Upwork events, or in concert with the Upwork ambassadors program.
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Evaluation
We have not completed our review of evaluation on this platform. Preliminary statistics from our survey follow. More details to come soon.
Percentage of respondents who said that evaluations of workers are...
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Tasks
In general, workers on Upwork were very positive about the kinds of tasks that they completed on the platform. Many workers in our survey used Upwork to locate freelance jobs in their area of professional expertise, such as graphic design.
Positive features of tasks on Upwork
Survey respondents generally found their work on the platform to be meaningful, interesting, fun, and satisfying — to a greater degree than other platforms. This makes sense for a platform centered on project-based and creative work rather than small micro-tasks that can more easily get repetitive, or may not be interesting in the first place.
How often is the work ...
... meaningful?
... interesting?
... fun?
... satisfying?
Negative features of tasks on Upwork
Very few respondents reported doing work on the platform that was ethically troubling, dangerous, or harmful.
How often is the work ...
... physically dangerous or harmful?
... demeaning or psychologically harmful?
... ethically questionable?
To ensure a good experience in conducting work, some respondents did note the importance of filtering the work that one considered up front:
You have to be wary about people pulling the same stuff they always do – looking for free work, looking to maybe not divulge so much information about implications of the work done (ethics). You basically have to be prepared to say no to anything.
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Technology
While few respondents thought that Upwork’s technology suite was perfect, most were generally pretty happy with it. The primary technology used by workers is the main upwork website listing freelance opportunities. Workers especially reported liking the Dropbox integration. Workers also used communication features built into the site, and a timer app that allowed them to document their work in case of a future dispute.
Especially in comparison to other crowdwork platforms, workers were very pleased with the website:
In comparison to other platforms (e.g. guru.com) the interface is the most logical and user-friendly.
However, there were a few minor complaints about occasional glitches and downtime:
It is reliable 90% of time, but sometimes the server gets down suddenly, and it is annoying.
As summed up by one worker:
It is work in progress but I am satisfied in general.
Percentage of respondents who said the technology is...
There were a few outstanding issues, worthy of mention:
Reliability & Speed
Several respondents reported having experienced some issues with site reliability, at least a few times, and several complained that even if it did not go down entirely, sometimes the site was very slow to respond, or project files took a long time to upload:
site is sometimes not available, sometimes difficulties with uploading files
When workers did encounter these kinds of issues, they were generally able to work around them. For example, workers talked about diverting from the integrated communication system to using email or Skype to communicate with clients:
On most of the occasions it is [reliable]. However there have been periods of time when it was really unreliable and clients and me alike switched communication channels as a result.
In a related concern, workers noted that the site was not always up-to-date in real time.
They do not update data in the real time for most of the website, but I got used on it.
Although this was especially frustrating at the beginning, most of the workers learned to deal with the issue over time.
Time Tracking: Bugs and Privacy Concerns
In order for workers to prove that they in fact, did, spend a certain amount of time working on a project, the platform offers a downloadable timekeeping app that takes occasional screenshots of the users’s creen. While freelancers appreciated the payment guarantees that Upwork provided as a mediator of their relationship with the client, they thought that this app could be better implemented.
For a multi-national platform, the timezone support that Upwork provides is quite lacking, and needs improvement. Workers who encountered problems with this, found creative workarounds, but the platform could do better:
Timekeeping – it wont let me register time worked in my timezone, and says its “in the future”. Therefore I have to put the time as it is in another time zone. Just a little inconvenient.
Other workers experienced issues with the time tracking app simply not working correctly and also taking up too many resources on their local computer — fighting with the apps that they needed to be using to do their work:
Upwork time tracking app is buggy and getting resource-hungry. It can take black screens instead of screenshots for some reason (on Ubuntu)
Another respondent raised the concern that, while they didn’t have a better idea for proving they had worked when they said they did, they found the level of surveillance disconcerting with respect to their personal privacy. See more below in Worker Concerns.
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Things Workers Like
In general, workers were quite positive about the platform, identifying a number of reasons that they liked doing freelance work through the service.
Flexibility
Like other platforms, many workers appreciated the flexibility that platform work — like any freelance work — provides.
The job as a freelancer gives me an opportunity to be with my children most of the time. It’s important to me. Upwork is the place where I can easily find the clients from all over the world and get the appropriate payment.
Well, as a highly independent individual, Upwork allows me to be in total control of my professional life, as I am the one who decides when and with whom to work.
Easy Way to Find Work
Many respondents found Upwork valuable because it made it easy for them to find freelance work — easier than if they were trying to find jobs locally, and off the platform.
It is large enough to gather clients. It has the usable means for job filtering, search and configurable RSS feeds for this task, so there is no need to stare into webbrowser for catching job.
In contrast to most micro-task based platforms, Upwork freelancers do not have to continually refresh the page looking for new work. There is no need to fight to be the quickest to pick up a good-paying job, because there is plenty of work on the platform to go around, and the client-freelancer matching process is not based solely on who clicks the job link first.
International Experience, International Pay
For workers living in areas with typically lower wages, the platform provided an opportunity to leverage this differential in their favor — by working through the platform, they were able to demand higher wages than they could locally, even if these wages were relatively cheap for international clients.
Because it’s easy to work with clients across the world, and the payment is better than payment in my country
As another worker explained in more detail:
It gives me access to a huge number of clients and projects, not available if I worked offline, and it gives me the chance to earn better than I could in my city. I’m a freelance translator, and I like being my own boss, so Upwork seems to be the best option (I tried other platforms but was not satisfied).
More common in our survey, were workers who found that working through the platform paid less than comparable work off the platform. Many of these workers used the platform part-time, as a supplement to other forms of employment. However, they still found Upwork to be a valuable complement to their off-platform work.
Many of these workers also appreciated the international nature of the platform — but for them, it was valuable in terms of a personal growth and learning experience.
I work because I have alot of free time and I dont like to waste time and Im good what I do (graphic design). Working with people around world provides nice opportunity to collect experience and learn more and expand my skills.
To Know the Market and Learn New Skills
The Upwork marketplace can also be a useful place for research. Browsing available freelance work can help people to identify what skills are in demand, and offers a place to try out and learn new skills on low-stakes projects.
I’m a business owner, my main client pays me on most months significantly more than I get paid through projects from upwork. However, Upwork is fundamental for me as I get the opportunity to constantly evaluate the market. I always encourage friends who want to pick up a new skill or are considering freelancing either to get paid or to pay someone, to first run some searches for their relevant keywords on Upwork.
Similarly, another worker found Upwork to be useful as a supplementary source of income as well as a place for skill development.
Upwork provides me additional earnings and it does not have limitations such as work time, work space etc. It also helps me to improve various skills. I have learned a lot on Upwork.
To Build A Business
People just starting out as freelancers, who did not yet have a sustaining client base, found the platform a useful bridge between being traditionally employed and setting out entirely on their own.
It’s a nice source of tasks while trying to establish freelance business.
In this case, the worker did not see the platform as a long-term employment possibility, but instead a way to fill in the gaps in the time it took them to more fully establish themselves in the local business community.
In-person meetups
Although Upwork is an “online” platform, this does not mean that nothing happens “offline.” Geographically-based worker groups sometimes held local meet-ups, and workers on the platform liked this community aspect of the platform — especially people who also worked from home as freelancers in their work beyond the platform.
More recently I’m a top rated freelancer here and in my city [*], top rated freelancers get invites to interesting, Upwork-organized events. I’ve once been a speaker for such an event. While this isn’t a fundamental component of my social life, at one point it actually was quite important, and I believe being part of a community that has the opportunity for physical meet-ups is a good argument to being on Upwork, especially for introverted types.
[*] city name removed for anonymity
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Worker Concerns
Platform Lock-In
Beyond client-freelancer matching, the Upwork platform provides several important services to clients and workers alike. Especially important to workers, the platform holds client funds in an escrow account while freelancer work is checked and approved by the client. This service allows the platform to guarantee payment to workers and eliminates the need for freelancers to track down long-overdue invoices. However, the platform does not attempt to retain its users — both clients and workers — with the offering of these services alone.
Indeed, once a trusting relationship has developed, it would often be advantageous to both clients and freelancers to move continued work off the platform. And, some workers have been successful at building relationships on the platform that they could later transform into long-term clients.
Also, I’ve often found good medium/long term clients that kept only their first project on Upwork while the rest were done via alternative payment methods.
However, moving off the platform can be very difficult to the point of being prohibitive in many cases. The Upwork User Agreement forbids any off-platform work between a freelancer and client for a 2 year period after their meeting on Upwork without payment of a minimum fee of $2,500. The paperwork overhead to request a termination combined with the size of the fees — generally greater than the fee upwork would charge if future work is conducted through the platform instead — essentially lock workers and clients into using the platform indefinitely.
This lock-in based business model is especially pernicious given Upwork’s recent decision to double fees for freelancers, without providing comparable new services.
Growing Fees
Soon before this survey was conducted, Upwork changed its fee policy, raising its cut from 10% to 20% of the contracted pay for any work that totalled less than $500. This was frustrating to many workers who felt like the increase was unfair, and too large.
Fees are growing – for both freelancers (from 10% to 20%) and clients (from 0% to 1% or even more).
They increased their fees to staggering 20% for first $500 and that is the main issue. I would be way happier with lower fees (this way almost $300 per month).
Worker Surveillance and Privacy
Questions of worker surveillance and monitoring are pressing not just in crowdwork, but across many forms of working-relationships, and especially in the IT industry. This is no less the case on Upwork, where the platform requires workers to run a time tracking applicaiton if they want payment to be guaranteed:
A special free software, Time Tracker, is needed to guarantee hourly payment. It is not mandatory, but if you work without it, Upwork cannot help you if the client turns out to be dishonest and refuses to pay.
In addition to several complaints about bugs in this application, some workers also raised questions about the way it impinged on their privacy:
Also the screenshots thing is way creepy. I am usually working on several things at the same time and may have some sensitive information open. I do not want screenshots of my bank account balance etc – from another screen I have open. I dont have any alternative idea about how to keep time. Its a good idea, just too pervasive.
Worker privacy and data protection is an ongoing area of work for unions, including IG Metall. Some information about German workers’ privacy rights is available as part of IG Metall’s ICT-industry specific pamphlet Key Points in Labour Law.
Imbalance in Client vs. Worker Support
Despite that Upwork charges the most money on the worker-side of the freelance transaction, many respondents felt that the platform catered towards the clients hiring freelancers in the services it provided.
On the client/employer-side, the platform offers services to filter freelancers. The “Upwork Pro” package, for example, offers “Premium talent, pre-vetted and handpicked for you” [12] Yet, there is no similar curation of tasks on the worker side.
Workers have to filter through tasks which are more and less serious, and through clients which are more and less prepared to actually follow through and pay for the work. For example, workers learned over time not to rely on verbal promises of prospective clients, or to agree to do some of the work for free up front as a ‘qualification’ for the job under question:
Sometimes an employer wants me to do research to see if I can do a job. In my case the prospective employer wanted me to research and be able to describe in writing a certain technical process, to be able to apply for a grant. There was a verbal promise of work/payment if application is accepted. I said no.
As one worker suggested, Upwork could mediate this better for the workers:
They should create a system for clients to take more seriously posted jobs since around 50% of them are never finalized (no one is hired).
Some workers noted that the more freelancer-friendly policies of Elance (which merged with oDesk in 2013 to later form Upwork in 2014) have been discontinued. Some workers thought the old policies should be reinstated:
[The] minimum for posted job should be raised from current 5$ to 20$ like on Elance before
Professionalization and Work Stability
Two thirds of our respondents worked less than 30 hours per week through Upwork. These part-time workers were likely to say that they could imagine working more via Upwork, but that the quality and availablility of jobs was too unreliable to depend on it as a sole income stream. For example:
Its a great idea. I would not mind working full time with these little jobs if it was stable.
Only about 14% of our survey respondents worked 40 hours per week on jobs secured through Upwork, and as noted above, several respondents saw the platform as an opportunity to bridge a gap — in their skills, in their work to establish themselves as a more traditional non-platform-based freelancer, in their move to a new country:
It is a really good idea for expatriates / immigrants who have trouble finding work in a new place. I expect to see more and more of this type of service.
For us who have to string together several small jobs it is awesome! (so far). It lets you set the terms and helps develop bargaining skill. It’s also a good way to see how far your skillset extends by trying some similar projects.
There was a sense among many respondents that the platform is not truly a serious professional marketplace.
It’s still crowded with low-level freelancers. It’s tests are meaningless.
In reading through these survey responses, it seemed that the platform may be best suited to work that is part-time, that helps workers fill gaps in other income streams, or that provides an opportunity to develop new skills — either technical skills, such as fluency in a new design application, or entrepreneurial skills, such as negotiating skills. In these ways the platform might function as a useful bridge to help workers succeed to a greater degree off the platform in the future. However, the growth of the platform economy raises questions about the future of freelance work. If traditional freelance jobs are replaced by platform-mediated work, workers will need new ways to advocate for their needs in order to collectively secure more stable economic futures.
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Ability to Refuse Payment Rejection:positive rating
Nonpayment for completed work is nonstandard; mechanisms exist for workers to dispute cancellation or nonpayment. -
Change to Terms of Service: Change:negative rating
Unilateral change possible at any time; 30 days' notice only for "substantial changes". Continued use of the site indicates acceptance of changes. -
Warranty Warranty:positive rating
Workers may revise work until it meets the client's requirements. -
Contact with Employers Client Contact:positive rating
No prohibition on contact with clients (in general, workers communicate with clients). -
Contact with Workers Rejection:positive rating
No prohibition on contact with other workers.
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Notes
- Upwork Homepage. https://www.upwork.com/, accessed 2017-04-27.
- Carney, Michael. 2013. The “gig economy” is growing up. Elance and oDesk just merged to dominate it. Pando, 18 Dec 2013. https://pando.com/2013/12/18/the-gig-economy-is-growing-up-elance-and-odesk-just-merged-to-dominate-it
- Elance-oDesk. 2014. Online work report: global, 2014 full year data. http://elance-odesk.com/online-work-report-global
- How It Works. Upwork. https://www.upwork.com/i/how-it-works/freelancer/. Accessed, 2017-04-26.
- Upwork Homepage. https://www.upwork.com/, accessed 2017-04-26.
- Upwork Payroll–Client, https://www.upwork.com/i/payroll-client/, accessed 2017-04-26.
- Upwork Payroll Agreement. https://www.upwork.com/legal/upwork-payroll-agreement/, accessed 2017-04-28.
- “Am I responsible for filing tax forms for my freelancer?”, Upwork Help Center, https://support.upwork.com/hc/en-us/articles/211067918-Am-I-responsible-for-filing-tax-forms-for-my-freelancer-, accessed 2017-04-28.
- Upwork Homepage. https://www.upwork.com/, accessed 2017-04-26.
- Freelancer Management System — Upwork Enterprise, https://www.upwork.com/enterprise/, accessed 2017-04-26.
- Freelancer Pricing. Upwork website. https://www.upwork.com/i/pricing/freelancers/, accessed 2017-04-27
- Upwork homepage.https://www.upwork.com/, Accessed 2017-04-26.
