Counter to Freakononics, my friend’s daycare in SF right now charges parents $2/minute for being late. So it seems to work for them. (Or it works because the cost is relatively high?)
Any reason to think their baseline is making money? The arithmetic of daycare - market-minimum hourly pay for the workers, vs. legal minimum per-child staffing levels, vs. tight parental budgets - is damned ruthless.
Unless it's some "Mrs. Smith's In-home Childcare" deal, it ain't a carer staying late at $2/minute - it's randomly keeping a business open, at $120/hour. With (good bet) a mandated-minimum staff of 2+. At SF wages. Plus the extra staff churn that randomly having to stay late causes.
Parents wanting ever-so-forgiving cheap daycare need to move an idle grandma into town.