It is an observable fact that many US developers do not work on-site, are not available on call between 9 AM to 5 PM, work for 20 hours per week, do not sign NDAs, and do not work in the adult industry. (He should probably get over the phone thing, given the utility of it, but it isn't a hard-and-fast requirement. 95% of my work happens over email.)

The right answer to your friend's predicament is not "Attempt to compete on price with people charging $5 an hour." It is "Demonstrate sufficient value such that his clients will deal if he can't make a phone call at 3 PM."