I'm not an economist, but I'll give it a shot: the vast influx of VC money allows for the creation of unsustainable businesses designed to "disrupt" (read: eliminate) traditional players. Buyers are happy to participate because they are getting a "deal" in the short term. Those who have been "disrupted" out of a job are often left to work for those same companies.

Meanwhile, the startup is trying to capture enough market share so that it can then raise rates and lower wages with less competition down the road. In other words, the traditional free trade model can be distorted by the effects of VCs who can operate with extraordinary scale of time and geography.