I seeded about 100 plants in clear plastic cups last year. Tomatoes, bell peppers,cucumbers etc. I didn't have any issues, it was actually helpful to see the root development and the moisture level in the soil. There may downsides that I'm not aware of.

Be watchful of algae growing inside the cup, and be certain that you create adequate drainage holes.

I don't recommend clear containers because roots are negative-phototropic (they don't like light exposure). You can google the effects of phototropism on plant development if interested.

Dave

Hi Brian. I agree with Dave that the clear cups should be avoided. Costco and Sam's club sell 250 of the 18 oz. red or blue cups (not Solo, an off brand) for about $10. I used them for a few years and the plants grow well in them but I switched to using 4" pots because the solo type cups have a tendency to be top heavy with a plant in them and topple over easily when transporting trays full or hardening off the plants in a moderate wind.

If you do use them, a good way to put drainage holes in them is with a wood burning tool.