What I didn't understand at the time, though, is that there's a fundamental difference between tapping someone through, say, DeviantArt to do work for you via Paypal versus using Elance, and that difference largely revolves around the fact that Elance feels that you owe someone money (and by extension Elance, because they take their cut) whether they do any work for you or not. And while this business method may work great for people with lots of cash jingling in their pockets, it's not such a great system for indies.
So here's a run-down of my no-good awful terrible shitty experience with Elance.
Step 1 was posting a job and hiring a freelancer. I'm not going to link to details because once I start doing that, the reader will be able to see the freelancer I ended up in dispute with and I don't wish any ill-will on him. My beef is with Elance, just to be totally clear.
So anyway: I posted my job details and hired the lowest-bidding freelancer to update my template to my specified needs for $100. A few days passed after which it shook out that there had been a misunderstanding between the freelancer and me over the scope of the job. The freelancer asked me to give him more money to cover the work as he now understood it, but an amount was not specified. I didn't feel comfortable with agreeing to an unknown sum to be paid through unknown channels, so instead I informed him that I would cancel the job, re-post it, and he could re-bid for what he felt the job was genuinely going to cost to do. And then I did so.
For whatever reason -- I will not speculate on motives because I don't know them and they're outside the scope of this post -- when I canceled the job and re-posted it, he chose to dispute the cancellation. And then bid on the re-posted job while the first one was still in dispute. I was genuinely puzzled at this behavior, and didn't feel comfortable awarding him the second job while he was disputing the first one, and meanwhile a freelancer with stronger ratings and (seemingly) a better grasp of the job details had underbid him. While I was still puzzling over this development, the first freelancer began sending me hostile emails accusing me of making things "complicated", and making me deeply averse to dealing with him further.
Unsure of how to proceed, I called Elance and spoke to their help center. I informed them that the freelancer disputing my first job was sending me uncomfortable emails and that I didn't want to work with him further. I asked if I needed to wait for the dispute to end or if I could go ahead and hire a different freelancer to complete the job. The help center assured me that I didn't need to speak to the hostile freelancer any further and that I could absolutely hire someone else to complete the work. They in fact outright encouraged me to do so.
So I did hire the second freelancer and he finished the work wonderfully and everything was lovely.
But the first job was still in dispute. A few days later I received an email from Elance telling me that I needed to submit to a "Dispute Assistance conference call" where a Elance associate would help me and the freelancer come to an agreement over the dispute. I was instructed to provide my phone number and a time available for them to call me -- and I was not given any kind of assurance that my phone number wouldn't be shared with the freelancer as part of this process.
I wrote Elance and informed them that (a) I was not comfortable submitting to a conference call with someone who was sending me hostile emails and (b) the work had already been completed, so that there was nothing to "resolve". I wanted my money back out of Elance's escrow holding, and (presumably) the freelancer wanted the full sum for a job he didn't do and for work that wasn't completed or submitted to me. I had no work to offer him in exchange for those earnings, so there was no compromise I could come to -- either I got my money back or I didn't, and I would prefer that Elance make that decision on their own rather than ask me to submit to a phone call with someone that they already knew -- because it was in my file with them -- was sending me hostile communications.
I was so shaken by this that I took the first opportunity the next morning to call Elance and reiterate that I did not want to be in a conference call with someone sending me hostile emails and that I did not want to provide my phone number to Elance. The help center informed me that they could not speak to my specific case -- they don't have a phone department for that -- but that they could speak to the resolution in a general sense. The help center associate assured me that if I hadn't received any work from the freelancer, and if the work was already completed, then my case would be closed soon and my money returned to me from the Elance escrow. I thanked them and hung up.
Two days later I received an email from Elance stating that the only way a case can be resolved is for either (a) both parties to agree to a resolution over the phone, meaning that I would have to submit to a phone call with a hostile party who might then have my phone number and more means with which to harass me, and for a "resolution" that he seemed highly unlikely to agree to, or (b) to submit to binding arbitration which would cost me $133 dollars, regardless of whether I won or lost. This meant I had the following options:
- Convince freelancer to drop the case, get $100 back. Net loss: $0
- Win arbitration, get $100 back at a cost of $133. Net loss: $33
- Draw arbitration, get $50 back at a cost of $133. Net loss: $83
- Lose arbitration, lose $100 at a cost of $133. Net loss: $233
- Concede case and pay freelancer the $100. Net loss: $100
Number 1 involved putting myself in a place of emotional stress, seemed highly unlikely to achieve the desired results, and involved a multi-week process that would automatically end in arbitration (according to the Elance email) if a resolution wasn't reached or if the other party failed to show up. Numbers 2 through 4 involved a lengthy arbitration process for something that had already been going on well over a week and was causing me serious stress and adverse health effects. Number 5, while the second-most expensive option had the obvious advantages of:
- Agency. It was the one choice I had complete control over.
- Immediacy. It was the one choice that wouldn't take weeks to resolve.
- Known Quantity. It was the one choice that didn't hinge on chance or others.
- Safety. It was the one choice that didn't involve giving out personal information.
And you'll also note that it's the solution in which Elance gets the biggest cut, since Elance splits the cost of the arbitration. I don't think that's a coincidence. But third-party arbitration is at least fair and balanced, right? Probably not. A 2007 Public Citizen report found that arbiters rule against consumers 94% of the time. And the net-ARB arbiter that Elance uses has raised serious questions about who even owns the company, let alone how fair their rulings are. There are allegations online that the Elance arbiter predominantly rules against the client so that the freelance gets their fee -- and Elance gets their cut.
But, hey, maybe I could take a third option (or in this case a 6th), and do an end-run around Elance and their probably-illegal TOS, right? I contacted Paypal, since I paid Elance with my Paypal account, and they encouraged me to dispute the charge, and to do it through my credit card (which I use to fund my Paypal account) since my bank has stronger protections for non-delivered services. Paypal also noted, while rooting around in my account, that somewhere in the Elance sign-up process that I clicked through, I had somehow given Elance permission to take money from my Paypal account any time they wanted, without further authorization needed from me. This shocked me, since I usually read stuff pretty closely before clicking through; I harbor a suspicion that the relevant disclaimer was probably cloaked in legal double-speak. Hastily, I revoked that access via Paypal and hung up to call my bank.
My bank, when queried, also encouraged me to dispute the charge. There were just a couple of concerns. One was that when the bank pushed on Paypal, who was then supposed to push on Elance, there was a non-zero chance that Paypal might automatically shut down my Paypal account as a protection against fraud. (The automated system sometimes flags disputed accounts as 'compromised' -- i.e., hacked or stolen -- and shuts them down permanently to protect Paypal from further loss.) Which meant that all my Paypal history would be gone, my donation links would be dead, and I'd have to open a new account and re-verify everything from scratch. My bank warned that they'd seen this happen a reasonably-concernful number of times.
The other concern was that if Elance tried to push back on the TOS and stick me with a bill for arbitration anyway, or turned me over to a collection company, there wasn't anything my bank could or would do for me. They would absolutely dispute the existing charge -- and would also send me reams of forms to fill out over a process that would take a number of weeks -- but they couldn't do jack about any new charges Elance tried to tack onto me. Nor could they do anything to protect my credit rating if Elance tried to muddy that up. Stellar. Which is not an indictment on my bank, just an observation that we live in a truly messed-up country when it comes to matters of finance.
In the end, I fell back on #5, for all the reasons outlined above. It was ultimately easier and cheaper to be scammed out of $100 than to have to face weeks of conflict and emotional turmoil, reams of paperwork, potentially losing my Paypal account as part of an automated fraud protection, and dealing with creditors and credit rating agencies. Elance got their cut, which was all they ever wanted from me, but they won't get a penny more and they've been blocked from ever accessing my Paypal account again. And while I did have a wonderful experience with my second freelancer, I recognize that I just plain got lucky.
Because according to the Elance TOS, your freelancer can deliver you nothing more than this...
...and still get paid, if the binding arbitration by a potentially biased and anonymous third-party that you paid $133 for decides against you.
And that's why I don't recommend Elance for indies.