If you have very little traffic then what you are saying is true, flex GAE requires you to keep one VM running. For our our app (Streak) we run 100's of instan

If you have very little traffic then what you are saying is true, flex GAE requires you to keep one VM running. For our our app (Streak) we run 100's of instances, we moved some of our services from standard GAE to flex GAE and saw a HUGE reduction in costs. Depending on workload we saw 5x-10x reduction in cost. To see why this is possible, look at the price of a standard GAE instance and the price of a default flex instance. For roughly the same price you get a way more capable machine. You just have to have enough traffic where you'd like to keep at least one instance running all the time. Enough traffic in this case is a really small number. If you're traffic is lower than that number than who cares about optimizing costs, its gonna be cheap no matter what.