I've been working for 2 years solely through upwork and I am really happy with it. I get a normal freelancing rate for my country (Australia) and sustain my family with it. I was sceptical at first seeing the low rates but decided to give it a fair try and was happy and surprised with the result. Most often it lead to move the work to outside the platform since their 10% fee can get to big numbers pretty quickly.
Also I'd like to add that some of the companies that I work for have found some great talent through the platform.
I totally agree with the author. I've had similar experiences with Elance/UpWork. I'm a Senior Software Developer from Europe and I can't really compete with developers who offer their services for $20/h. But still, it's not impossible to get a job. I worked on a few projects that were mostly already started projects from cheap software firms that couldn't complete the job for whatever reasons. The clients I met were usually frustrated, burnt a lot of money, didn't have any experience about software development and/or management and were hoping to save the project by hiring a more experienced developer to fix the project. The codebases I've seen were awful. For example, no git repository, just a plain ZIP file, unstructured PHP code with 300 warnings, duplicate code... I'm sure there are all different kinds of projects on UpWork, also good ones. But these are hard to find and I doubt UpWork is the right place for experienced Software Developers with higher rates.
Just ignore developers with lower rates. Good employers often understand what is adequate rate and they realize they can hire somebody cheap and teach them, or hire professional and learn from them. So with higher rate you will attract better employers. Even more: employers check profiles of most expensive developers first :) Though sometimes they just completely ignore your rate and just "want to discuss" - people are different.
I can echo your experiences. I did manage to find a project management gig on oDesk, but after that have applied to many with no luck. The barrier to entry is too low, by allowing jobs that are $50 or even $500 for what amounts to a lot of work, everybody is usually driving towards the bottom dollar, versus having real companies/people looking for serious work.
I've also heard from the person that did hire me that they had been burned several times by developers that would give them poorly-built products, but because they weren't familiar with the details of how it was built, only found out weeks/months later when things started to break down.
I had heard the theory about the market for lemons before, but none of the discussions of it seemed to be able to come up with a better example than the classic partial one about used cars. This looks like the case study the theory predicted.
I notice that most projects he's actually billing around $50-60/hour - which is not that impressive for the US (probably much better where he lives). Maybe he stands out because his advertised rate is relatively high, and he cuts them a special deal each time?
The other thing is, why stay on UpWork after the connection is made, why not just build the client base and use UpWork as a lead source?
Maybe he starts with non-Upwork clients and then brings them "into" UpWork, getting 5 stars every time?
About a year. I started from $30/hour, then switched to $60 and current rate is for consulting because I don't have free time for full-time projects (I'm working full-time already and I love my work so don't want to switch).
2 strict rules: 1) never negotiate rate, 2) don't work too hard (I prefer to work 40 hours per week).
Also I'd like to add that some of the companies that I work for have found some great talent through the platform.