Upwork is not the only autocracy that oppresses the poor and weak, but it’s the one that does it so explicitly. With new pricing introduced this May, they have a progressive tax system of 7.7% to 22.7%. The poorest bracket hits… freelances with the lowest income. How come? Let’s see.
“Unfair advantage” is a term that fully applies to online marketplaces. It’s anywhere from hard to impossible to build a competing marketplace.
A lot of major players with close to unlimited resources tried to repeat the success of Ebay; Microsoft and Yahoo among them. They all failed: buyers want the largest selection, so they stick to Ebay. Sellers want more buyers, so they stick to Ebay.
Upwork has an enormous unfair advantage. It’s the largest freelance marketplace in the world:
Just as with Cuba or even Switzerland, it’s not easy to leave Upwork for something else. As a reputation bank, Upwork keeps your reputation capital. Loosing your reputation capital and building it from scratch, on a new, better platform? You’ll find yourself among online refugees, a phenomenon that’s yet to be studied.
What is clear now: Upwork’s policies have an enormous effect on the policies of millions of people. A stronger effect than the policies of their own governments.
It’s a hidden tax. Although hidden, it decreases the purchasing power of the members.
It cannot be avoided; they collect it way more effectively then the state. While some small businesses in the US are under-taxed up to 70%, you can’t avoid paying Upwork (or can you?)
You’re still tax liable in your own country. There’s no double tax treaty between Upwork and your state.
Let’s face it: the richer pay fewer taxes. The appearance of the social state in the 20th century hasn’t resolved that; in fact, the gap between rich and poor has been growing since the 80s.
The Case of Liliane Bettencourt
Being a principal shareholder of L’Oreal, she didn’t work a day in her life. While her wealth is over 36 billion, she claims she hasn’t spent more than 5 million dollars a year. Indeed, no matter how sophisticated your taste is, you can’t possibly spend more on everyday life. She’s taxed on this relatively modest income, rather than her enormous revenue of her enormous capital. The latter is largely untaxed due to loopholes.
The progressive scale is not the same everywhere.
Still, the global trend is the same: even in Scandinavia, inequality increases.
Upwork introduced this progressive scale on May 3, 2016:
Who falls into the top bracket?
What we see here?
Questions to Mr. Kasriel
The answer is probably in the graph provided by Upwork, according to which, a freelancer regarded by Upwork earns way more than $10,000:
We have yet to see policies which limit the power of Upwork and other marketplaces:
See you soon, Upwork.
But the way, we partner now with Payoneer (a cool way for freelancers to get paid by marketplaces and customers from abroad – we use it ourselves): you can get a $25 discount for our unlimited plan after you receive a $100 payment to your account, if you register via this link. Great deal we think 😉
About the Author
Ivan Boyko is a founder of Icons8. He got his first job after drawing a banner with CTR of 43%. After years of creating icons, he specializes in rapid prototyping and backlog grooming.
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