I actually did two projects on RentACoder. The first one, I just did a small, cheap project to get a good initial rating. On the second, my first "real" project, a system for parsing feeds and putting product listings on a set of online store websites, when I finished the project, the woman asked, "Where's the Admin System?" And I was like, "What?" We had never discussed an Admin System. And I went back to the bid proposal, from 30 days earlier, and it had the words "Admin System" in it. So I was contractually obligated to build her an Admin System. She contacted RentACoder, and told them I had failed to deliver and she didn't have to pay. I calculated my average hourly wage over the 30 days, and it was about $2/hour. I was pretty upset -- this woman wanted to keep the code I had written and get out of paying $2/hour. Anyway, the RentACoder mediator stepped in, and between the 3 of us we negotiated an agreement where I would write the Admin System late and still get paid. When I finally did get the money, it was equivalent to a little over $1/hour. I never did any work on RentACoder again after that. I went through and examined the time frames and pay amounts for a hundred or so bid proposals on RentACoder, and calculated that the highest one could expect to get paid on RentACoder was about $4/hour. That might be ok if you live in Bangladesh, but in the US, cost of living is too high, and McDonald's will pay at least $7 or so. Most of the people in the system are in foreign countries, but there are some Americans -- I don't know how they do it -- they must have one or two companies who hire them for project after project and negotiate the rates privately much higher than the public numbers.
That was in 2005. I don't know if it's gotten any better since then, but I doubt it. A few years ago, I heard about a guy who put the Turing Halting Problem on RentACoder and got bids on it -- people agreed to do it in 30 days for a few hundred dollars. The Turing Halting problem is, of course, unsolvable -- and has been mathematically proven to be unsolvable. The problem is to take source code for a program and determine whether it runs forever or whether it stops, without running the program but only by static analysis of the source code. So all those people bidding were mathematically proven to be bullshitting.
So, someone puts a bid proposal online and the bullshitters bid the price down to some extremely low number. In theory, the rating system should hammer anyone who does this and keep this from happening, but in practice, it doesn't seem to work. But every day RentACoder publishes lists of hundreds of completed projects. So, obviously the system does work. So does it work or does it not work? What's really going on? I don't know.