The "free" pricing model may or may not be the future, but how and what RH chooses to emphasize about the service tells you a great deal about where their priorities lie as a business. Instead of: safety, security, conservative / risk-averse business practices, robust systems and infrastructure, deep industry knowledge and experience, integrations with pro trading software and systems, service offerings suited and geared to pro or aspiring pro traders, etc. we see: "free" (ie opaque) pricing, "trade from a smartphone app", service geared and marketed towards unsophisticated novice customers, arrogant millennial tech bro culture, executive team with minimal or no background in trading or markets, growth and "disruption" as the overriding business focus, and a flippant attitude towards compliance and regulation. It's all fine and good to play around with a few bucks on your phone, but when it comes to my serious trading business I'm staying far away from them.
Obviously you are not their intended audience. Can't argue with their success though. Example please! I am too synical to believe in any of this marketing BS. Things change too quickly and what was once rarely still is.
Every firm - at one time or another - has technical problems. Does their pricing scheme create this? Doubtful as you still have to hit an exchange for retail US options. Teething problems have occurred at RH before and maybe they need to invest more in their infrastructure. I imagine they SmartRoute everything and this may have been problem there. The release said only "some" accounts were affected so it sounds like it may have been a communications issue with a lack of redundant capacity. FINRA will require them to do a postmortem. It will be curious to see if anyone else was down at the same time. From their form 606 they seem to use the same MMs as everyone else.
93% of their option flow goes to Citadel and Wex. 7% goes to SIG. Payment is less the .50 per contract from their 606.
Regardless, it provides pricing pressure for other trading firms to keep their costs down. So all traders benefit even if we don't use it.