With more Americans doing freelance work, the platforms that connect them to clients are trying to get a bigger piece of the action. In the latest example, Elance-oDesk this morning announced it has a new name, Upwork, and is introducing a new freelance talent platform that shares the same name. The move comes as the company pushes to build annual freelancer revenues on the platform from $1 billion today to $10 billion six years from now.
“We’re seeing this as a complete relaunch of the company,” said Stephane Kasriel, who became the company’s new CEO on April 20, in a phone interview. He led the global team of more than 300 engineers, designers and programmers to launch the new Upwork platform. Fabio Rosati, who led the Mountain View, Calif.-headquartered company since its formation, will remain active on its board of directors, according to the firm.
So what does the change mean? As of today, oDesk will disappear and redirect to Upwork, which charges clients the same percentage for paying freelancers are oDesk did. Elance, which charges clients a slightly lower percentage, will continue to operate. “At least for now we are letting people who want to be on Elance stay on Elance,” Kasriel said. Starting now, Upwork will be the main platform, and new users will have to sign up there. Ultimately, the company aims to have a single platform, Upwork, but that change will not be immediate.
oDesk and Elance started out as separate platforms. They announced their merger in December 2013.
So where does the name Upwork come from? The word work can sound like a "downer," Kasriel explained. Projects offered on the platform, he says, are different. “It’s really awesome work--better work than you could find locally,” he said.
In its push for growth, Upwork faces competition from a growing number of other freelance platforms, ranging from general marketplaces such as Freelancer.com and People Per Hour to industry-specific ones, such as 99 Designs. Upwork is looking to gain an edge by enabling clients to hire freelancers more quickly. “When we talk to freelancers about their experience in getting a job on one side and accepting a job on the other we’re hearing it’s still taking too much of my time and still really inefficient,” said Kasriel.
One key element that will speed the process, says Kasriel, is the Upwork Message Center, a new chat tool the company has introduced. It can be used by companies that want to chat with a freelancer who is available for immediate work or by clients who want to communicate with teams of freelancers. The Upwork Message Center will be available to anyone who wants to use it, regardless of whether they are signed up for the platform, added Kasriel.
One of the challenges to growth facing many freelancing platforms is that because they are global, freelancers in countries where wages are on the high end of the scale, such as the U.S., must compete against those in parts of the world where the cost of living is much lower. That can drive down pay. As a result, many highly compensated freelancers don’t use platforms, opting to find all of their work through word of mouth.
If a platform could attract a greater share of freelancers who command top rates, it would likely gain a major edge, because the platforms generally take a cut in each project. For instance, Elance charges someone who hires a freelancer on the site an 8.75% service fee, so if the freelancer bid $500 on a job, the client would pay $547.95, once the 8.75% service fee--$47.95—was tacked on. oDesk charged clients 10%.
Elance-oDesk has seen rising pay rates for U.S. freelancers, according to Kasriel. One contributing factor has been the introduction of new high-skilled categories, such as data science.
In designing Upwork, the company has taken steps to make sure its best-rated freelancers have high visibility and to ensure they have a steady flow of work, according to Kasriel. “One of the goals of this real time platform is to be able to make the hiring much more relationship- driven, which is really aligned with high end work,” Kasriel said.
Also on Forbes:
