The Planet Money episode the article references makes a point about the waitlists and why it is not necessarily a scam or a market failure. The margins on these

The Planet Money episode the article references makes a point about the waitlists and why it is not necessarily a scam or a market failure. The margins on these places are low. The financials really only make sense if the school is at full capacity all the time. For a school to survive in these conditions, a waitlist is necessary so that if children or families leave -- which happens all the time -- they can immediately backfill that money. A point not made in the PM episode is that in markets with a lot of waitlists, charging for a position on the waitlist increases the likelihood that the families on the waitlist will be available when their turn comes. If waitlist membership is frictionless, then the daycare cannot count on that future backfill as strongly.