Upwork raising Client Marketplace fee

Mark

It’s not clear to me when but they did it but didn’t realize they had. I have thoughts what are yours?

DuncanThePig

I'd love to be a fly on the wall in their meetings at times to know the thought processes that lead them to these conclusions.

Tiffany

My theory for the past couple of years has been that Upwork is decreasingly interested in working with regular clients (v. Enterprise and Managed services).

Mark

Tiffany And I think your theory fits in with my theory that they are trying to morph into some kind of global outsourced managed services provider. There was something in one of their AI announcements that really struck this home with me but I can't find it now.
At the very least I think they are moving more towards TopTal. That push a few months ago for Expert Vetted was interesting.

Tiffany

Mark Yes, we have discussed this in another time and place. :)

I had honestly started to doubt it briefly, because the timeline for my initial expectations passed and they just kept finding new ways to temporarily increase revenues. But the overall trend still seems to point that way. Circle back if you remember where you saw whatever you saw that made you think whatever you're thinking.

Mark

Tiffany I was going to post about it at the place but then I was like, eh, fuh those people. I think that a lot. Thinking that a lot right now.

Mark

Tiffany it's right here:
We’re building powerful capabilities — like Uma, Upwork’s Mindful AI — into the Upwork platform to power our Managed Services offering. These enhancements help you quickly scope projects, assess skills, and build the right team to deliver complex business results faster and with better quality. And now you can access Upwork's services both on our platform and through the business solutions you use every day.

Which you leads you here: https://www.upwork.com/enterprise/managed-services

It's all very AI-centric

Tiffany

Mark I...

That's not gonna work.

ETA: But it does explain the shift in the timeline.

Eve

I think they raised the clients payment fees in October or something like that. I’ve been waiting to hear some complaints about it, but not a single one of my clients have mentioned it to me. Which I find a bit strange, as several of them are well beyond the 2 year mark, and others I’ve brought to Upwork, after they contacted me on LinkedIn. So we could go off platform if they think the new fee is too much.

Mark

Eve Maybe we are all just getting used to everything costing more.

Eve

Probably. Makes me think I should raise my own rates soon. But with Upwork’s new and higher fees, I’m thinking this isn’t the right time. My clients are usually not the price sensitive kind, but I guess they as well have their limits for what they’re willing to pay.

Ravi

The following four-year-old article may shed light on the priorities of Upwork: Provide services to bigger clients with fewer (possibly EVT) freelancers.

There could well be a two-tier setup: earn reputation from one and money from the other.

https://www.businessofbusiness.com/articles/18-million-users-have-been-purged-from-gig-economy-site-...

Keep these excerpts in mind:

“Part of the shift may be attributed to [redacted], who emphasized that the company is targeting Fortune 500 companies as opposed to smaller, one-off companies just looking for a quick gig worker. At the earnings call, she spoke of a ‘skill gap’ between what companies were looking for on a platform like Upwork and what they were getting.”

“[Redacted] pointed to three goals for 2020: 1. Attract more, bigger clients; 2. Enable more spend per client; 3. Make more high-quality matches, particularly in Upwork's technical categories of Web, Mobile, and Software Development.”

Bilal_M

Has there already been another client service fee increase?

It could lead to less client hire rate, maybe not. I'm not sure. But one thing I'm sure is that it affects the freelancers growth in earnings in long-term contracts. For example, a client may not agree to freelancer's request of increase in hourly rate, because they're already paying higher because of the service fee.