Indeed, and as you say it seems to be a total false economy, as only the most desperate and inexperienced instructors will put up with the absolute worst terms, so the customer gets the worst product, and goes elsewhere often willing to travel further and pay more for the more experienced instructors.
Some schools just don't seem to see it this way, I've even heard of some paying just £10 per hour for trial lessons, just appalling. You couldn't hire a plumber for that.