I think it will work regardless, most of the gigs will just be done remotely.
Something like this has effectiveness which goes as a function of the number of active nodes. It's much easier to increase that locally. Scaling by adding other areas after you've knocked a few corners off and gotten a reasonably active network going is relatively straightforwards compared to trying to eat the whole pie at once.
Facebook and Craigslist both did this very successfully.
Limiting it to one city or region would be a mistake, in my opinion. This isn't a local story, any more than Mechanical Turks or oDesk is.