This article was written about the Upwork marketplace. The issues mentioned herein do not generally apply to Upwork Direct Contracts, an Escrow and contract management system for clients and contractors who met outside Upwork. Direct Contracts was introduced several months after this article was first published, and is a service we frequently use with our clients.

Upwork, formerly E-Lance O-desk, has become one of the largest platforms for finding freelancers on planet earth. Clients can easily post jobs in virtually any industry, freelancers submit proposals, clients screen, hire, collaborate with, and pay freelancers, and pay them on the fly. Job done.

Most clients have used the platform to get large projects done for dirt cheap, since freelancers come to the client in large numbers, hungry, desperate and grovelling-ready to do the job for below a living wage.

Uhmm, not exactly. That ship where you could get things done for dirt cheap by freelancers on Upwork has long sailed. Upwork freelancers are paying as much as 20% in fees to Upwork and paying quite a good chunk of money just to have a chance to bid on your project. Were you, in this financial universe, imagining that the freelancers will not pass on these high costs of doing business there to you? Or, that in the event you refuse to bear the costs, the quality of work you receive will not suffer?

In this article, I’m going to dumb down 9, no-brainer reasons why you shouldn’t use Upwork.

And this is, as a freelancer who has an active profile on there but no longer takes on new clients through Upwork.

Upwork Freelancer Profiles are not transferrable assets

That is, if they could even be considered assets.

Would you spend significant effort building a business, spending tens of thousands of dollars doing R&D, getting trademarks and patents, in short, building a brand, if you knew you couldn’t bequeath the brand so built to your progeny? Or sell the brand, reputation and all to a large corporation seeking to acquire it. If you knew that the brand dies the day you die?

I highly doubt it.

Because in that case that business would not even be considered an asset, in the strict sense of the word. It can’t be sold or transferred to provide value.

This is the weird scenario you find on Upwork.

Yes, according to the Upwork Terms of Service, you may not sell, transfer, or bequeath your Upwork account to another person. As a matter of convention, and as has been repeatedly clarified by the mods in their forums, Upwork does not give “consent” to its users to transfer their accounts.

The reasons for this rule are perfectly understandable.

When looking for a freelancer to hire, clients want to know that the reviews on the freelancer profile were actually earned by that freelancer, and not by another freelancer who sold the profile to a wanna-be who will end up screwing them up.

This is understandable.

However, this is also the deathbed of Upwork.

As a freelancer, I wouldn’t spend days, nights and years and tears building a business on Upwork that I can’t transfer to my wife or progeny when I pass away.

Nor would Neil Patel.

Nor would Elon Musk.

Nor would McKinsey.

Nor would indeed any other entrepreneur or professional for that matter looking to transforming his industry.

This is why you would really struggle to find the crème de la crème on Upwork.

And if you manage to, be aware that they won’t last long there.

Because they will struggle (and fail) to build a brand inside Upwork.

You can’t seriously build a business inside another business over which you have no control.

It is impossible to build a brand by working through Upwork.

Upwork Has Highjacked the referral chain

Upwork has an anti-circumvention clause in its TOS which states that, as a client, you may only send money to your freelancer for anything and everything, through Upwork. This is the most sacred rule on Upwork, and those who violate it get permabanned. It is very much understandable that Upwork would seek to protect its main source of income (service fees they deduct from payments sent through the website) in this manner.

But Upwork didn’t stop there. Upwork took this one step further to require that when you refer your freelancer to another client for a project, the client must hire and pay the freelancer through Upwork, else you would be deemed to have circumvented.

In the words of Upwork:

Note specifically this phrase:

You agree to use the Site as your exclusive method to make all payments for work directly or indirectly with that party or arising out of your relationship with that party.

 So let’s say, you hire a freelancer who did a stellar job for you, and you feel inclined to refer them to a friend, colleague or relative of yours who has the same problem and for whom your freelancer would be a perfect fit.

Well, you can’t, except the payment from that third party will be sent through Upwork.

You can’t guarantee that your referral will want to use Upwork to hire your freelancer.

Therefore, your account could be permabanned because your referral chose not hire your freelancer through Upwork.

This aspect of the Upwork referral chain has grave public policy implications for the millions of Upwork users, and should a class action suit be brought up because of this, Upwork is very likely to lose out and may well be asked to pay billions for the referral chains of freelancers they have so highjacked.

Can Upwork really consider itself to be a marketplace, when it has hijacked a freelancer’s referral chain even for legitimate referrals to third parties?

This is the reason why I discontinued accepting new clients through Upwork.

Because I know the value of my referral network. It’s worth billions of $.

Upwork’s hijack of the referral chain is precisely why you won’t find many high-calibre freelancers working through Upwork.

Rigid Payment Options

On Upwork, there are broadly two ways clients pay their freelancers

• Make a fixed price deposit to Upwork before freelancer commences work
• Start an hourly contract with the freelancer. Freelancer bills you hourly and it’s charged to your credit card.

Both of these methods involve paying upfront for work.

This may not be a big deal, especially for small projects.

But with large projects running into tens thousands of dollars, having to pay upfront all the time can quickly become problematic.

On Upwork, there are no options, even for highly creditworthy clients to defer payments by 30, 60, 90, or 120 days.

All payment must be made upfront, and this can quickly cause cash flow problems for small businesses hiring on Upwork.

At Sunderland Translations, we do offer deferred payment solutions to our UK clients for large projects, on a case-by-case basis. Contact us to find out what payment plans we can offer you for your localization project.

Tendency to Cause Cash Flow Problems for Freelancer

When a client hires a freelancer for a fixed price project on Upwork, he deposits money into Escrow for that freelancer to commence work.

Note that the freelancer doesn’t receive the money yet.

He receives it after he has completed the work, submitted it to the client, and client approves the payment to the freelancer.

What of projects where the freelancer had to hire someone else to do sub-tasks outside his particular skillset for that particular project? How does the freelancer pay his worker?

And if the freelancer though highly skilled for the project, has insufficient funds to pay these running expenses? How does he go about completing that project?

It is for this reason that projects that involve the freelancer making significant running expenses in the course of carrying out the contract may often not have the best outcomes on Upwork. The freelancer may often have to cut corners if, especially for fixed price projects, he has very low operating reserves while working on the contract.

Most Professionals Do Inbound Marketing, not Outbound

At the very core of Upwork is Freelancers coming to you, not you coming to them. See below how Upwork works (or rather, why it does not work).

Yes, freelancers have to come to you.

This is how at virtually 90% of jobs get filled on Upwork. But, does this method work?

Well, this review on Trustpilot pretty much sums it up.

The ones that come through are lower quality than they’ve ever been, because the smart ones are leaving.

Yes, most professionals would rather have their clients come directly to them (and not through another intermediary). They know their worth and they do the kind of marketing that makes clients come to them, rather than falling over 50 other freelancers grovelling for an Upwork project with a $5 placeholder project value.

Here are just a few reasons why most professionals would rather have you come to them, than they come to you

• It is a more efficient way to bring in new clients. The outbound way through Upwork and other freelancing sites requires freelancers to spend a tonne of time hunting for, and applying to projects, 98% of which proposals will turn out to be crickets. The freelancer is spending more time applying than they do working, studying, and upgrading their skills.

But with inbound, the freelancer can spend less time applying to jobs, and more time working and creating value for their clients.

• It helps the client to feel less badgered. Since the average person is exposed to 4,000 – 10,000 advertising messages each day (including bids on Upwork), inbound seems the best way to bring in highly qualified clients with high intent on purchase.

Can you imagine a neurosurgeon banging your door, asking you for work?

Of course not. You ought to go to the neurosurgeon. Find him.

• It allows the contractor to build stronger, longer-lasting relationships with, and offer greater value to their client. Email lists, newsletters, content that provides the client cutting-edge insight on the industry; professionals can only do this using the inbound method. Upwork freelancers can’t do this as Upwork works the outbound way. In fact, while we at Sunderland regularly send email newsletters to our clients providing value and industry insights, Upwork’s interface and conventions according to their TOS expressly disallow this.

• It’s a no-brainer.

At Sunderland Translations, we’re not just preaching Inbound. We’re living it. We’ve never spent a dime on ads. Every single client we worked with came through because another client we worked with, loved our services.

It’s now easier to find and hire professionals directly.

Without going through the middleman called Upwork.

Because in most cases the professional you’re looking for is just a google search away.

In fact, thanks to the recent updates to the google algorithm, it’s much easier now to find and hire the professional you’re looking for directly. Thanks to which you probably found this blog post; you have no need to use Upwork to find us at Sunderland Translations.

Payment Services Have Caught Up

Clients now have several options as to how they can securely send payments to their freelancer, without having to go through an intermediary, and without having to foot a whopping payment processing fee of between 3-10%, as is the case on Upwork.

Clients can make payments through

• Paypal
• Flutterwave
•  Local Bank Transfer aka Faster Payments (UK)
• ACH (US)

Some freelancers simply ask their client to “Venmo” them the payment. The point is, there

are a tonne of ways by which clients can securely, safely pay their clients without having to pay high payment processing fees.

At Sunderland Translations, we provide our clients hassle-free ways to pay, without going through an intermediary that charges as much as 10% in fees.

Risk of Suspension / Permabans – Instability

Tired of having to deal with unreliable freelancers?

A freelancer suddenly becoming unavailable when you need them most because they’re working on a more important project?

Or when you find that the profile of the best Upwork freelancer you ever hired has been closed (for whatever reason)?

These are all situations I’ve been in as a client.

I can’t tell you how many times I’ve seen this when I wanted to rehire a high-performing freelancer I previously worked with:

Sure, one can quickly click to browse other freelancer profiles, but it’s a pain to have to start afresh so often, with a freelancer churn rate as high as Upwork’s.

I find it easier to pick things up and maintain consistency with freelancers I’ve worked with before.

With freelancers on platforms like Upwork, you won’t have this luxury.

And, professionals on there don’t like working under the threat of their account being permanently deleted at the slightest go.

Upwork up until very recently, was deleting profiles for submitting too many proposals!

So, professionals who want stability and permanence for their businesses set up their own shop.

Not through Upwork.

Racism & Discrimination on Upwork

While Upwork’s Terms Of Service expressly forbids clients from expressing preference based on race in their job postings, the reality and the actions and reactions of the Upwork management are a far cry from the lofty “aspirations” stated in the TOS.

• Not a week goes by without a freelancer or client coming forth to report an abusive or racist client on the Upwork community.
• Job posts that discriminate on the basis of nationality are allowed to persist.

Now this is not a casual, one-off incident on Upwork.

Every other week, someone comes forth to complain about how a client made a job posting in which he warned Indians to not bid.

Would you, as an Indian, be glad to work on a platform that actively tolerates discrimination against your race?

Many professionals, out of self-respect have left Upwork as a result of rife discrimination.

In my time on Upwork, I flagged several jobs expressing an unlawful racial or national origin preference, and no action was taken.

Clearly, it’s not about what Upwork’s Terms of Service say.

It’s about the reality on ground; where the rubber hits the road.

And, with Upwork’s Geo-blocking feature, freelancers are being excluded from applying to US- and UK-only jobs. During the testing and roll-out of this feature, the Upwork team touted this as a way to enable clients access freelancers for jobs that needed to be done locally.

 But with the passage of time, this feature is routinely being used to hire freelancers for work that can be done from any part of the world.

And, Upwork encourages clients to discriminate in this manner by setting the US-only toggle ON as the default.

Many do not realise the toggle is on, and just go with the flow, hiring US-only.

While it is not clear if Upwork wants to shift from being a platform for finding and hiring freelancers globally into a US job board, one thing is clear – many talented freelancers have left Upwork because of this discriminatory geo-blocking feature. You should look no further than the forums to find a litany of complaints from freelancers over this.

The rollout and widespread use of the Geo-Blocking feature is a vast departure from the Upwork that advertised itself as bringing economic opportunities to people in far-flung parts of the globe.

Did we miss something?

Why did you stop using Upwork? Tell us in the comments below.