I don't think they they'll need to increase, fly.io is already rather expensive as far as cloud offerings go today: shared 8 vCPU / 16GB VPS is $85/mo at fly, Hetzner is $16/mo for the same.
How isn’t? You’re paying for a VM with access to a slice of resources. Yes fly.io offers some clever deployment and routing, but it’s still your code running on a VM.
You could ask the same question about why Hetzner is so much cheaper than the big cloud providers. If there weren’t any tradeoffs, presumably every company running containers or VMs on a big cloud would move to Hetzner and save 80%. Why isn’t that happening?
Whatever the answer is, it’s probably the same answer for why many companies would likely be willing to pay more for fly.io than Hetzner as well.
It's worse. For a 16 vCPU + 32GB RAM + 20TB traffic (fly.io has max 8 vCPU) I would pay around $750 on fly.io instead of €30 on Hetzner. People are willing to pay a lot for I guess an easy deploy story ?
Developer time is pretty costy and if you can save a lot of dev time a noticeable higher running cost can be well worth it for some companies (like smaller companies, startups which have still a fluent changing business model etc.).
Through also it's not a fair compression because for the kind of services where being close to the edge and redundant over many places matters Hetzner isn't even an option. AWS maybe, but AWS is also pain in my experience.
