yes, create another user, give the username and passowrd to them. You only need to assing a directory if you need others to access the data.
Otherwise only you and him will have access to that special directory. You may need to give directions on how to work his way through the directory structure to his folder. Best if you go through it first then it will be easier to explain. Because at first glance it appears like he can see your entire domain, but in fact, he only has access to the special directory and can not see any of your files.
Remember that to retreive the files he uploaded, you must access the ftp account using the username and password you gave him, because the ftp account you normally use can not see his files.
Hope this helps,