Contractor e-market launches in the UK

UK freelancers could be under threat from cheaper overseas competitors who can bid for, and work on, IT projects here using a new online service.

The eLance website, which launched in the US last August, creates an open market in cyberspace where buyers and sellers from more than 140 countries buy and list services in dozens of categories.

eLance is likely to attract bids from contractors in countries where wages are much lower than in the UK, potentially pricing UK contractors out of their own market. For example, a company based in the UK could use professionals in India to design a website.

James Fulton, eLance's European launch director, said the service would not disadvantage UK-based freelancers, even if overseas contractors were cheaper to employ.

"The lowest bid doesn't automatically win. Quality is key," said Fulton, adding that some UK buyers feel more comfortable using suppliers in their own country for cultural and convenience reasons. The system also gives UK contractors a platform for the rest of the world, he said.

The website is designed for any work that can be done remotely, not exclusively IT projects.

Companies post project descriptions to the site which are open to competitive bidding to sellers of the various services available. Once bids have been posted, the buyer can choose from the range of suppliers who respond and get the best price and/or service possible.

There are more than 100 services currently on offer, ranging from logo and web design to software development and copywriting.

Once a project has been completed, detailed feedback is posted on the site, so potential customers can check a professional's reputation before making a decision.

Fulton said the service is currently free to use, but eLance "will eventually take a percentage of the revenue".

"Like auction sites which take a single-digit percentage of a deal, we are also in the process of implementing a billing and payment system. Currently, all payment is done offline and its up to the customers to transact in any way they want," he said.

The site would soon also be multi-currency and will be available in different languages, he added.