Thanks for sharing, 100% respect your perspective. I want to add some counter points here for readers so that have a full picture.
1. Trust - you say clients more easily trust hourly contractors. I don't think working hourly helps build trust at all, as you are essentially hoping that the client understands the volatile nature of software development. If you have clients that get this, then it works fine (dev agencies or people hiring for existing dev teams for example). Otherwise, it's a tricky balance.
2. Type of Clients - I didn't see any connection between hourly billing and quality clients.
3. Fixed price contracts can certainly be long term, it completely depends on the project you are chasing, but that starts to become independent of your billing model.
4. It's 100% about the output. People hire hourly because they feel it is a safer investment. People hire devs because they want a certain outcome. If you don't achieve that outcome, it's a fail regardless of the billing model. If you are working hourly and it takes you longer than you thought, there's a good chance the client won't be happy about the unexpected costs.
5. This is probably a common scenario, I agree with that.
6. There is zero requirement for a waterfall approach with fixed price projects. You can easily implement an agile approach, it totally depends on the terms YOU set as a developer. Otherwise yes, you can get yourself into trouble if you don't know what you're doing.
7. Working hourly doesn't mean the client will suddenly have a bigger budget if you feel like you need more time to work on something. Budgets are there as a maximum. If a developer is going over the set budget without warning the client ahead of time, there is a good chance the client will have an issue.
8. If you have to trick clients into payment a certain price by showing an hourly rate rather than a fixed price, this is a bit questionable in terms of ethics, but it may also be an issue with the type of clients be sought after. I have had fixed price projects where my effective hourly rate is $100 / hr. I've had hourly jobs where my rate is $28 / hr. There is nothing about hourly billing that gets you paid more, it's the type of clients and how you frame the value of the project to them that matters.
9. If you aren't including these meetings and contingencies into your fixed price, then you are pricing wrong. Fixed prices should always make up for risk, and you tell the client up front. Most of the time, clients are happy to pay a little more to be free of the unknown costs that come with hourly billing.
10. This is a communication problem, hourly billing is just avoiding an underlying issue that should be resolved regardless.
11. I love time trackers too lol
12. If how many hours you work per week is the goal, that sounds very unethical. You are hired to provide value to a client, not to work as much as possible. The outcome is the only thing that ever matters to a client, and if you can finish that project sooner than anticipated, that's great for both parties.
13. You can always bump up your minimum prices to fixed projects as well
14. Life balance is more difficult, but that's only because it's now 100% your responsibility to manage time efficiently. But I agree, hourly billing makes it easier to plan that out week by week.
