Too Fast but Not Too Fair: Uber’s Gender Earnings Discrepancy

Australia national gender pay gap sits at 15.3%, and has been hovering between 15% and 19% for the last two decades. It’s a complex issue caused by many factors. 

It’s not simply that both genders are doing the same work but getting paid differently (although that’s one of the factors).  Women tend to have more unpaid caring and domestic chores, they work in jobs that attract less pay, and require more workplace flexibility to accommodate other responsibilities.  Taken together, women’s greater time out of the workforce affects their career progression and opportunities.

Would the gender pay gap still exist if women had more flexibility? Let’s take a look at one of world’s most popular ride-sharing services, Uber, as an example.

Is Uber the new example for gender wage gap equality?

Uber seems to offer solutions to some of the issues around the gender pay gap: Their drivers have the freedom to hit the road and start working any time they want; a system of pay based on distance travelled; they also have gender-blind matching of drivers and riders. Theoretically, under those conditions, men and women would earn the same.  Perhaps riders would even prefer female drivers?

According to data collected in the United States from January 2015 to March 2017, there was no gender discrimination on the platform - meaning people didn’t show a preference based on the gender of their customers, or their drivers. This is a good start.   

However, men were found to make 7% more per hour on average.

So what accounts for this pay difference? 

Drivers' decision of when and where to drive accounts for 20% of the wage gap. Men tend to work shifts that have higher pay i.e., late night, early morning shifts. Men also work routes that pay more, such as airport trips. The other reason is that women tend to drive for Uber for shorter periods of time – Men are more much likely to drive for Uber for over 2 years. But how would this affect the hourly pay gap? One word: Experience.

It was found that the more trips a driver does, the more they learn the best ways to make money from the platform.  While money earned per trip doesn’t increase, drivers just get better at knowing when and where to drive, how fast to drive, and which ride to strategically accept/cancel. This accounts for 30% of the wage gap.

Need for speed

In general, men drive faster than women, this means that men are completing more trips per hour and thus making more per hour.  Faster drivers also attract higher ratings from customers. Driving speed accounts for the remaining 50% of the pay gap.

There is indeed a gender pay gap on the Uber platform, but it is not a structural problem. While gig-work like Uber offers women more flexible work hours, there are still other factors that contribute to the pay difference.

Perhaps over time, the app would improve enough to close the earning gap between new drivers and more experienced ones. Perhaps by putting the spot light on speed as the major determinant of the pay gap, slower drivers (of all walks of life) can step on the pedal and get a bit richer (or die trying).

- Hannibal Thai 
Hannibal is a first year PhD student researching how message framing can be used to promote environmentally friendly behaviours.