Online Marketplaces: Upwork and it’s Invisible Platform Architecture
In 2001, François Bar published a groundbreaking paper titled “The Construction of Marketplace Architecture.” One of Bar’s pivotal assertions — the invisibility of modern marketplace architecture — is why we study Upwork today.
In the decades since online freelancing emerged as a new form of employment, digital labor markets have evolved in ways unimaginable in the early 2000s. Despite drastic changes in the online landscape, through his astute delineation of conventional and digital markets, François Bar’s fundamental explanation of a digital marketplace has endured since 2001. Although the article was published when online marketplaces were still in their infancy, Bar’s assertions about modern marketplace architecture remain surprisingly relevant today.
One of Bar’s foundational concepts, the ‘architecture’ of a modern marketplace, embodies the intersectional nature of platform and market. By positing that a platform’s digital interface is also the often-overlooked market architecture, Bar explains that the design of an online platform is both the structure of the market and the negotiating space for users. With the proposal a digital transaction is inherent to both the market and interface, the article goes on the recognize that changes to the interface not only alter the negotiating space — it signals a modification to the market space, too.
Despite the unprecedented evolution of online platforms, Bar’s conceptualization of architecture remains paramount to understanding digital labor markets: the only way to investigate an online marketplace is through the platform interface. It was already clear to Bar in 2001 that a platform’s ability to influence its digital marketplace through the construction and alteration of its online interface would be a capability with cascading effects.
One of Bar’s assertions — that digital marketplace design could be covertly altered through software — is a concept integral to understanding the current landscape of online gig work. The ability to collect and analyze user data allows platforms to exercise a massive amount of control over their digital marketplace. While users can observe changes in platform architecture through the interface, modification to market-making architecture is invisible. Changes in platform architecture that alter the market — but do not change interface — cannot be seen by market players.
Understanding the underlying features and functions inherent to any online marketplace predicates a nuanced understanding of the current state of online gig work. As freelancing platforms have grown exponentially, the study of digital marketplaces has never proved more important. Between 2019 and 2021, the number of platform gig workers increased by 170%, meaning interaction with invisible marketplace architecture is at an all-time high, calling into question the effect of market-making platforms on the modern workforce.
As determined by Bar, studying online labor is also automatically a study of market-making platform. To further understand how online workers experience a digital market, our research team is several years into a longitudinal study of Upwork, one of the most established, popular, and competitive digital marketplaces in existence. The site has maintained a massive user base since before the rise of online freelancing during the pandemic (in 2017, Upwork had 12 million registered users) and has experienced continual exponential growth, gaining 2 million new users in 2022. As Upwork continues to shape market making architecture to maximize profits, millions of workers experience unnoticeable and uncontrollable changes to their freelancing experiences.
Bar outlines four levels of commercial activity — communication infrastructure, marketplace, transaction mechanisms, and deliverables — that occur in both conventional and electronic spaces. Two decades later, these operational elements remain intrinsic to the construction digital marketplaces and prominent within the Upwork platform. Upwork has a communication infrastructure that allows freelancers and clients to interact within the online marketplace. Embedded in the communication infrastructure is a marketplace where freelancers and clients interact, negotiate, and agree on a transaction. The overarching platform control means Upwork is directly involved with aligning supply and demand within the marketplace, attempting to maximize the amount and efficiency of transactions through unseen strategic modification. Upwork’s transaction mechanisms allow clients to pay freelancers directly within the platform. Users exchange deliverables in the form of services, where freelancers sell their service and employers hires services.
Given the intangible nature of digital markets, the role of platforms in shaping how market players find and interact with each other is largely overlooked. Workers primarily interact with the clients who seek out their services, not the platform, and do not recognize the influence of the platform architecture over their freelancing experience. Despite the platform’s central role in facilitating and mediating transactions, some freelancers overlook this reality and only recognize themselves and clients as actors in the functioning of a marketplace, especially when the interface does not undergo visible changes.
One freelancer we interviewed used an apt analogy to describe their experience with Upwork. While users cannot see behind the interface, this quote illustrates how freelancers witness inexplicable glimmers of Upwork’s control within the marketplace but struggle to articulate it.
“It’s more like you’re a genie in a bottle and suddenly these jobs pop out and you take them. You have less control over the timing than you think.” P15
Other freelancers, like our participant quoted below, attributed the precariousness of finding and securing clients solely to their own navigation of the marketplace, entirely overlooking Upwork’s ability to directly dictate how the marketplace functions.
“I have applied for so many, like I have sent out so many proposals, but haven’t been reached out to by anybody, though I’m like 100% I hit the mark for each and every contract I have applied for, but I still haven’t received any feedback or even if they declined my proposal or anything. I haven’t gotten any response, so I don’t know, in those cases, if it is just me not competent enough to work for that contract or if it is that the employer doesn’t have time to review everything, is my challenge which I’m trying to understand.” P96
While they act as market-makers, platforms are also businesses with vested interest in their profitability. Although freelancing sites help users reach their goals — the exchanging of labor and payment — profit is the primary goal for platforms mediating online marketplaces. Just like any other corporate entity, platform owners work tirelessly to maintain a competitive advantage.
To maximize the efficiency of their marketplace, online labor platforms leverage the data created through user interactions to better understand their digital space. Platforms make strategic decisions based on this data and alter their online market to maximize profits. Bar accurately predicted intense competition between online marketplaces by observing how platforms quickly learned how to retain users through a process he refers to as creating ‘stickiness’. User retention continues to be a top priority of digital platforms today. Upwork attempts to incentivize users to stay on the platform by allowing users to build up a positive reputation through profile metrics such as their Job Success Score.
Over the years, digital labor markets have undergone significant transformations, yet François Bar’s early 2000s insights into the architecture of digital marketplaces have remained strikingly pertinent. Bar elucidated how the design of an online platform serves both as the market’s structure and its users’ negotiating space, emphasizing the integral role of platform interface in shaping market dynamics. His theories highlight the invisible changes in market-making architecture driven by software modifications and the profound impact of data analytics in controlling digital marketplaces. As platforms like Upwork have grown, affecting millions of freelancers’ experiences through unseen alterations, the importance of understanding the interplay between platform design and market functionality has only intensified. This understanding is crucial for grasping the nuances of online gig work and the overarching influence of platforms on the digital labor market.
Written by Clea O’Neil. Special thanks to Michael Dunn for his contributions.
