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Female Uber drivers earn less than their male counterparts (but it’s not what you think)

Uh-oh, Uber might be in hot water again.

An exhaustive analysis of more than a million Uber drivers and millions of trips shows that the ride-sharing service's female drivers consistently earn less per hour than men – 7 per cent less, as it turns out.

Uber has been at the centre of allegations of widespread sexual harassment and gender discrimination in the male-dominated world of Silicon Valley – a scandal that contributed to chief executive Travis Kalanick's downfall last year.

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But the frat-boy culture apparently has nothing to do with the pay gap at Uber. The company pays all its drivers exactly the same fees for the distance and time they travel on each trip, based on a fixed and non-negotiable formula.

Instead, the gap is the result of behavioural differences that could help our understanding of why disparities persist in many work settings even after decades of efforts to combat inequality.

It's about choices they make, but also about constraints on their time that many women face, including children and family pressures.

The single biggest contributor – accounting for roughly half the pay gap – is that men drive faster than women.

And they are rewarded for it by picking up more rides in the same amount of time spent on the road.

The remainder of the difference is because male drivers choose to pick up passengers in more lucrative locations and gain experience more quickly by driving more hours a week.

For example, a driver with more than 2,500 lifetime trips earns 14 per cent more an hour than a driver who has done less than 100.

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"We find no evidence that outright discrimination, either by the app or by riders, is driving the gender earnings gap," concludes a new study by economists at Stanford University, the University of Chicago, the U.S. National Bureau of Economic Research and Uber.

The so-called gig economy was supposed to be the great equalizer for women. At Uber, at least, it hasn't worked out that way.

"Even in the gender-blind, transactional, flexible environment of the gig economy, gender-based preferences can open gender earnings gaps," the authors said.

Male Uber drivers apparently like to drive fast, not necessarily to earn more, but because they are "more risk-tolerant and aggressive" on the road by nature, the study found.

Men gain an extra earnings edge by working more hours on average, allowing them to learn more quickly and target the best locations to pick up passengers, the authors concluded.

The research is important because Uber is one of the largest platforms in the gig economy, where companies use apps to match consumers and independent contractors, in real time. Uber has more than three million active drivers worldwide who do a total of 15 million trips per day.

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The company shared some of its closely guarded trip data with researchers to provide a detailed look at exactly why an earnings gap exists.

The gender pay gap among Uber drivers is roughly in line with the disparity within other groups of workers who do similar tasks and share similar characteristics.

The study also includes some interesting findings, unrelated to gender.

The 1.8-million active drivers in the United States gross an average of US$376 a week and US$21 an hour, based on driver data collected from January, 2015, to March, 2017. Uber pockets a quarter of the fares collected from passengers. And turnover in the business is extremely high. Sixty per cent of drivers are no longer working for Uber six months after starting.

The choices women make about how much they work has implications far beyond the ride-sharing industry.

Women may be opting to work shorter hours – either because they want it that way or because they can't work longer.

The same pattern is true of many white-collar professionals as well, including lawyers, pharmacists and recent MBA graduates.

The authors point to other research that links gender pay disparities to choices men and women make that affect their productivity, including the hours they work, the gaps they take in their careers for child-rearing and the jobs they take after they have children.

Earnings disparities "are pervasive across the skill distribution … whether in the traditional or gig workplace," the study found.

Ultimately, that may be one of the hard lessons in the fight for gender equality.

The pay gap will likely continue to shrink.

But it may never go to zero because of the choices, and unique societal challenges, that many women face.

Financial Consumer Agency of Canada spokesperson Lynne Santerre explains how to protect yourself from future fraud if your personal information has been hacked. The Canadian Press
Editor’s Note: This article has been corrected to state that three million full time drivers make 15 million trips per day, not per year.
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