Freelancer

Information - Freelancer

Freelancer is located in Australia. Their site started under the name of GetAFreelancer, though in recent years, in attempt to create a monopoly, they have purchased EUFreelance, LimeExchange, Freelancer (UK), Scriptlance, Freelancer (Germany), Webmaster-talk (USA) and most recently vWorker, formerly Rent-a-Coder.

Employers and workers alike have experienced difficulties migrating to Freelancer, as their website operates using a completely different model than the sites of which they were forced to migrate to. Many were not given notice of the transition and were forced to change their user names, which made such changes even more difficult. This made it particularly difficult for outsourcing employers to connect with the freelance workers that they had built relationships with. Currently Freelancer offers one of the largest databases of employers and workers, though the majority are not active on their site.

The fee schedule of Freelancer is a bit confusing. Their fees range from 3% - 5%, though they are offset by mandatory membership fees, which range from free to $49.95 per month, as well as additional fees for posting in certain categories, using an optional editor, utilizing their mediation/dispute feature, canceling a job, featuring job posts and bids, etc. Each level of membership dictates the end of job cost, in the form of a percentage, which stems as high as 10%. Both employers and workers incur a fee on Freelancer. According to Freelancer's Terms of Service, even inactive accounts, (accounts that have been inactive for one year), incur a monthly fee of $10.

The membership that the user selects determines the information that they can include within their profile, the number of jobs they can bid on or post to solicit bids, the payment requests that can be initiated and the withdrawals that they are allowed, among other limitations. Additional fees are incurred if the project is posted in a certain category, needs to enter into mediation or arbitration or meets other criteria.

Freelancer operates on a pay-per-bid (membership) and job fee that must be paid up front. Each membership allows 'x' bids per month, (anywhere from 10 to 500). The employer must pay 3% of the total job fee upon awarding the project to a worker, and upon acceptance of deliveries, the worker must pay between 3% - 10% of the project fee, or milestone (if milestones are initiated), again dependant on his membership. If the employer fails to fund the project or for some reason the project is unable to be completed the worker is not refunded the job fees. Workers are also unable to bid on new projects during the interim of an employer accepting a bid placed and the worker accepting or declining the offer. This is troublesome to many users whom are awaiting another employer to make a decision while scheduling their workload; most workers find this rather hindering, while employers find that it causes unnecessary delays. Jobs are also canceled if the user does not log in often enough; this means that when an employer posts a project for a specific worker it may be canceled if the worker doesn't log into the site as often as Freelancer deems appropriate.

The most common complaints about Freelancer are their fees and lack of protection for its users. They offer a milestone payment system, though in the end, according to their TOS, it is up to the employer to decide if milestone payments are released to the vWorker or not. Actually, their site is set up in a manner that allows the employer to decide if he even wants to pay for the project, by asking the employer (at the point of project acceptance) what percentage he would like to pay - anything from 0% to 100%. When complaints are filed Freelancer generally cites their TOS, "Our Site merely acts as an online venue to allow Users to offer and buy professional services... We do not guarantee that a User will actually complete a transaction or act lawfully using the Site".

Since Freelancer allows unverified users to post jobs and accept bids on their site, workers often find themselves paying a membership and job acceptance fee, and in some cases even completing the project, only to have the employer disappear. This happens to employers as well. Additionally, Freelancer holds the worker responsible should an employer, typically seen with unverified employers, claim a charge back on their payment method; in such cases they deduct the entire job amount from the workers account and charge them a $20 processing fee, while refusing to refund the job fee paid at the time of acceptance.

Freelancer also uses an algorithm to calculate and recommend a bidder to employers. The recommended bidder is not hand selected by an individual reviewing the workers qualifications, past work history or on-site communications for the job in which they are being recommended. This taints the bidding pool and gives an unfair advantage to one bidder in particular, as many employers do not understand how algorithms work. And, since this is a hidden algorithm, we cannot definitively state how their site determines which bidder they are recommending, but we have suspicions.

Freelancer also reserves the right to use employer and workers projects for the purposes of marketing, as detailed in their TOS. Furthermore, their TOS states that user's personal information will be used within their own site and/or associated sites for marketing campaigns, offers, new products and services, and though this can be recalled, canceled or rejected by the user, doing so terminates the user's account. Therefore, in short, if a user does not agree to their personal information being shared they cannot have an account on the site. Their terms also specifically state that they will not be liable for damages resulting in the use of their site, (a standard usage agreement), but with an added disclaimer clause of, "The limitations on Freelancer .com's liability to you above shall apply whether or not Freelancer.com, its affiliates or staff have been advised of the possibility of such losses or damages arising."

They also offer an affiliate program, though this is not exactly straight forward. Affiliate's must be registered user's of the site and are limited to referrals of those in which no previous relationship has been established; this is troublesome for vWorkers that would like to refer employers that they have worked with before. Affiliate account earnings on Freelancer are based on the user's net project commissions.

Freelancer also practices an interesting method of accounting with regard to offering employers to post jobs in their own currency. Of course, this in theory sounds reasonable and even appealing. However, the manner in which it is handled is not quite as simple, reasonable or appealing, as they use a rather low calculation for conversion. They convert the funds in-house, add a processing fee to it, and then issue payment to the worker or refund to the employer. Putting it into more simple terms, with an example. Suppose you live in England and have a refund (or a payment) coming from their site for $27 - the amount in USD that you earned or posted to their site and expect to be paid or refunded. Based on your location (UK), they convert these funds into your country's currency, so this $27 payment or refund you are expecting is actually paid to you in the amount of £16 after their in-house conversion and processing fee; in real life, this £16 actually converts to $23 (USD) in the UK. So while collecting funds from both employers and workers in US Dollars, Freelancer actually pays or refund in that person's currency, minus a processing fee.

 

The four main differences between Freelancer and Rent a vWorker are:

• Freelancer is based in Australia, whereas Rent a vWorker is owned and operated in the United States, under the jurisdiction of US Law.

• Freelancer operates using membership fees and forces the workers to pay a job fee before the work takes place. Rent a vWorker does not have membership fees, and job fees are not paid until the job is fully complete.

• Freelancer allows unverified users to post jobs and bids on their site; on Rent a vWorker all users must be verified before they can post or accept a job and enter into a work agreement.

• Freelancer charges for mediation should a problem arise on the project. Rent a vWorker includes mediation and arbitration for free.

• Freelancer does not require the total project amount to be escrowed at the time the contract between the vWorker and employer is agreed upon. This leaves both parties unprotected. Rent a vWorker requires escrow on all jobs at the time of acceptance.

• Freelancer takes funds in USD but pays out (or refunds) in the user's currency after deducting a processing fee; this typically equates to lesser money. Rent a vWorker only operates in USD.

• Rent a vWorker allows you to earn affiliate pay on any referral, regardless of your past or present relationship, if any, and pays lifetime residuals. Freelancer places restrictions on which referrals you receive credit for and pays a small percentage for "approved" referrals.

 

 

 
Basic - Free
Basic
Standard
Premium
Membership Fee:
Free

$4.95

$24.95
$49.95
 
All accounts that are inactive for 1 year are assessed a $10 monthly fee until the account is reactivated or the type of membership is upgraded.
 

Why does this matter?    Freelance workers generally provide their services and work for lower rates than large corporations, as they are individuals working out of a home office or a small group of vWorkers working within an office. They are able to offer lower pricing because their overhead is lower. Adding the burden of a membership fee, in addition to an end of job project fee brings their costs up, which in turn costs the employer more money. Membership fees are also a deterrent to many freelancers, who will take their talents to sites that do not impose membership fees.
 
Job Fees: 10% for Freelancer;
3% for Employer
10% for Freelancer;
3% for Employer
5% for Freelancer;
0% for Employer
3% for Freelancer;
0% for Employer
   
Other Fees:
Additional fees are not fully disclosed until job or bid is posted, though Freelancer charges for posting a project in certain categories, canceling a project, initiating a dispute, hiding a project from search engines and what is referred to in their TOS as "miscellaneous fees".
         
 

Why does this matter?    Freelance workers generally provide their services and work for lower rates than large corporations, as they are individuals working out of a home office or a small group of vWorkers working within an office. They are able to offer lower pricing because their overhead is lower. Adding the burden of a membership fee, in addition to an end of job project fee brings their costs up, which in turn costs the employer more money. Membership fees are also a deterrent to many freelancers, who will take their talents to sites that do not impose membership fees.
 
Bids allowed per month:
10

50

150
500
 

Why does this matter?    The number of bids allowed per month is significant because freelancing websites designed for companies to hire outsourced labor generally have thousands of workers on them, and because of this, each worker that is actively looking for work must place a lot of bids before their bids are accepted. Limiting a worker's bids means that they cannot bid on all the projects that they are qualified for, which in turn deprives employers from seeing all qualified freelancers.
 
Skillsets and Keywords Allowed:
20

50

100
250
Items in Portfolio:
5

20

100
Unlimited
 

Why does this matter?    Limiting a worker's skillsets in his resume, or an employers needed talent areas and/or keywords while posting a job, causes an undue hinderance on the job for both parties. Employers may need several skillsets or keywords to properly describe their project so they get qualified bidders, limiting these areas can pose difficulty for the employer while describing what is needed. Additionally, many employers post a part of their project, knowing further work will follow, in hope to establish a relationship with a worker for the future work. Limiting the skillsets and keywords that a worker is allowed can detour an employer from selecting that particular bidder, thinking he isn't qualified. Many vWorkers have talents in many areas, but with limitations in place they cannot accurately portray their skills.
 
Money Back Guarantee for Employers & Payment Guarantee for Workers:& Operation

Freelancer does not offer a money back guarantee. They do provide a milestone service, in which the employer can escrow a project in part or whole, depending on the arrangement worked out with the worker. However, in the end, the employer has the discretion of releasing the milestone payment or asking the site to refund it, so this system provides a false sense of security.

They also offer a paid dispute service, although details on exactly how their mediation and arbitration operate, and the fees associated with it, are not clear.

In cases where the employer does not post a milestone or fails to fund it (or the job after deliveries), the standard reply is that their site is simply a venue to connect employers and workers, collecting monies or deliveries due is the sole responsibility of the parties involved.

Additionally, as per their TOS, any escrowed milestone funds can be used for company expenses as deemed appropriate, and any payment due to the worker or to the employer as a refund are viewed as an unsecured debt.

 


Why does this matter?   A guarantee or money placed into an unbiased escrow account is an absolute must for people trading services online. You are working with people that you have never and will likely never meet face to face. In fact, at times you might work with someone that is on the other side of the world. Employers do not want to lose their money by paying up front and not getting their project delivered, getting unacceptable deliveries or receiving their deliveries past their deadline. Just the same, workers do not want to invest in a project and deliver it without getting paid.

The only way in which an online venue can ensure that each party is protected is by instituting an escrow that is held until the project is complete. This way the employer knows that he will get his money back if the worker doesn't deliver, and likewise, the worker knows he will get his payment when he does deliver. And should something go wrong, both parties know that a third party will step in and help mediate and/or settle the dispute.

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