If you’ve been to a grocery store recently, you know inflation is here. But it’s not just consumers struggling to cope with rising costs, so are companies that are trying not to price out customers.
Netflix Inc (NASDAQ:NFLX) raised subscription costs, Chipotle Mexican Grill, Inc. (NYSE: CMG) upped the price of burritos and even Robinhood Markets Inc. (NASDAQ:HOOD) increased the interest rate of its margin loans.
Upwork Inc (NASDAQ:UPWK), an online work marketplace, announced it will be instituting new fees and a plan.
What Happened: Upwork announced on its website that the company will offer a two-tier subscription model for clients. Under the first tier, the Client Marketplace Plan, Upwork will charge clients 5% per transaction (3% if using a checking account), but no monthly subscription fees. Upwork’s ACH charges used to have a 0% fee, but they will now have a 3% fee. Credit card charges used to carry a 3% fee, and will now be 5%.
The top tier, Upwork Plus, will charge clients $49.99 a month, which will include benefits such as extra support from Upwork’s team and perks for job candidates to stand out.
Why It Matters: Many companies rely on Upwork and other peers, such as Fiverr International Ltd (NYSE:FVRR), for hiring contractors and temporary workers. While some companies may cancel their contracts with Upwork, most will not be in a position to do so. This will help Upwork bring in more revenue, which is good news for investors.
Upwork’s stock could be hurt if the economy takes a downturn and hiring slows. But for now, if hiring trends continue to be positive, Upwork’s stock could have some nice upside, especially considering the new fees the company will collect.
