Upwork in Real Danger of Losing MILLIONS over ONE DOLLAR “Conversion Fee”

In 2020, I caught Upwork red-handed for posting fake jobs to keep freelancers bidding. Upwork admitted that there were so-called “test jobs” and promised to refund freelancers for wasted “connects.”

I’m doing it again in this story. This time is different, even more severe, and expensive.

Ignorance isn’t always bliss, my dear fellow freelancers. You should’ve known better. I did my “call of duty” with this story:

What happened?

The Notorious Section 7.3 of Upwork ToS Got A “Silent” Update

Do you know? Are you aware? Do you care? Well, you should.

It all started in the official Upwork Community with a legit question that raised a storm of criticism and confusion. Here is a screenshot, just in case this thread becomes unavailable for unknown reasons or “technical difficulties.”

Upwork Community is free to access and read all questions and answers. If you want to participate in this or any other discussion, you must have an Upwork account — just a kind reminder. You are welcome.

I had a question of my own for this vigilant Upwork user. How did Amanda find out about the change? Upwork user Mykola did us all a huge favor.

Wait! What? Why? We are talking about ToS (Terms of Service). There isn’t and shouldn’t be anything top-secret about it.

Let’s have a look, shall we?

Here’s a link to the Non-Circumvention Section 7 of Upwork’s ToS.

Fun fact. I have a law degree. In Upwork’s defense, I have to say this:

  • Upwork has the right to change its ToS at any given moment.
  • Upwork has no obligation to inform its users each time about these changes.

Now, there’s another question.

Does Upwork have the “moral obligation” to inform its users about the ToS changes, especially if these changes have serious implications, to say the least? Yeah baby, yes, they have!

So, what’s the catch with Upwork’s “deafening silence?”

Something Ain’t Right — It’s Much More Than Just The Math

It seems that one Redditor is on the right track.

C’mon, you can’t be serious. It’s just one buck. What’s all the fuss about it?

In plain English and layman’s, not complicated legal terms, let’s delve into it together.

So, here it goes.

Let’s say for the sake of this story, you’ve been working with a client on Upwork for quite some time. At one point, you realize that you don’t need Upwork anymore. You wish to take your work and client outside Upwork.

You may opt out of the obligations in Section 7.1 with respect to each Upwork Relationship only if the Client or Freelancer pays Upwork a Conversion Fee which is a minimum of $1,000 USD and up to $50,000 USD for each Upwork Relationship, unless Client and Freelancer have had an Upwork Relationship for at least two (2) years.

I know how it looks and sounds, but let’s be fair. You’ve found a long-term client on Upwork. You accepted Upwork Terms the moment you signed up. So, hold your freelance horses for two years, and then, you’re free to go. Or, are you, for real?

Up until the latest changes of Upwork ToS, what you and your client decide to do after two years was none of Upwork’s business. But, things changed.

If Client and Freelancer have had an Upwork Relationship for at least two (2) years, the Conversion Fee is a nominal $1 USD for administrative purposes.

Still doesn’t make any sense? No problem, you aren’t the only one.

Spot on! Congrats!

You see, Upwork wants to KNOW, Upwork needs to KNOW! And, this is a clever way to do it.

What do you think it’s going to happen when you and your client get stuck in the Upwork ToS door?

Here’s my interpretation of it:

Upwork: “Where do you think you’re going?”

Freelancer & Client: “We’re leaving. Two years have passed. We’re free.”

Upwork: “But, have you paid the Conversion Fee?”

Freelancer & Client: “What for? Haven’t we paid more than enough during these two years?”

Upwork: “Yes, you have, and we appreciate it. But, you still have to pay one dollar for administrative purposes.”

Freelancer & Client: “Isn’t that a convenient way for you to find out who’s leaving your platform?”

Upwork: “That’s your free interpretation of our ToS. We can’t comment on that.”

Freelancer & Client: “Who says you won’t take advantage of this information to try to convince us to stay?”

Upwork: “Again. We can’t comment on that.”

Freelancer & Client: “It’s a ridiculous amount, that Conversion Fee of yours, but doesn’t it represent a valid legal reason for violation of your ToS, especially the Non-Circumvention and Opt-Out clauses?”

Upwork: “Well, legally speaking, it does. But, let’s work it out. What would you like to drink?”

One Dollar OR One Billion Dollars — It Doesn’t Make A (Legal) Difference

Well, you see, it’s not that simple.

If Upwork hadn’t had the problem of users wanting to leave the platform, they wouldn’t have imposed the infamous Section 7, in the first place.

Obviously, things escalated so much to such a degree that additional “measures” had to be implemented. Desperate times call for desperate measures. Upwork is trying to keep “the best of the best” by any means necessary even if it means using the “soft legal force,” such as the Conversion Fee.

Upwork lawyers must have been very expensive. My legal opinion you didn’t ask for: that’s the money well spent for Upwork.

There’s only one “one dollar” problem, though. This one-dollar fee can cost Upwork millions of dollars in lost service fees. What do you think how will the users react to this latest Upwork’s legal catch-22?

The users choose their words carefully in Upwork Community for obvious reasons. That’s why I prefer Reddit where people speak their minds freely with no fear. If you’re asking me, “vox populi” at its finest.

You Had One Problem, Upwork — Now, You Have Two

Upwork could’ve left things just the way they were before, and nobody would’ve noticed it, let alone discussed it for days.

People come and go. It’s always been like this in the freelance industry. Upwork is no exception. Upwork should’ve kept its ToS mouth shut unless the problem of users leaving after two years was so big that it turned into an “exodus.”

Upwork has succeeded in one thing. It raised the “awareness” of its problematic non-circumvention clauses and opt-out fees in the worst possible way:

  • Users are discussing legal matters instead of new projects and features in the Community.
  • Instead of offering a juicy loyalty carrot, Upwork is threatening with an even longer legal stick.
  • Those who have second thoughts about leaving, now can’t stop thinking and talking about it.
  • Those who’ve already been on their way out just got an additional reason not to look back.
  • Those who had no clue about the possibility to leave got an interesting idea to think about.

Congrats, Upwork! You just paid one dollar for the most expensive boomerang in business history. If and when it hits you back, it’s going to cost you millions.

Originally published at https://hackernoon.com on September 29, 2022.



Eight-Time "Noonies" Writing Award Winner

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