Uber Gender Earnings Gap: Discrimination or Not?

When are gendered differences in pay due to wrongful discrimination and when are they not? The study referred to in the linked blog post mines Uber’s extensive ride data and finds that women earn 7% less than do men when driving for Uber. Whether this is an instance of wrongful discrimination or not depends upon the factors accounting for the difference.

The study’s authors observe that “Uber uses a gender-blind algorithm and drivers earn according to a transparent formula based on the time and distance of trips. There are no negotiated pay rates or convex returns to long hours worked, factors that have been shown to open a gender earnings gap in other settings.”

They find that three factors explain the earnings gap: driving speed (men drive on average 2.2% faster), experience (the average male Uber driver has been driving for Uber longer than has the average female Uber driver), and choices about where to drive (as a likely result of the second factor, males are more strategic about when to drive – what days of the week, and which hours during the day – than females).

If one is convinced that this is nonetheless unjust discrimination, the interesting question becomes: what ought to be done about it? Require males Uber drivers to drive like females (or vice versa)? Require all drivers to adopt uniform driving-schedule strategies? Pay female Uber drivers a 7% premium? (That likely wouldn’t be permitted under existing anti-discrimination law.)

This piece could be used in the classroom to discuss what are and aren’t the hallmarks of unjust discrimination, as well as what justice in general requires. >>>

LINK: The Uber Pay Gap (by Alex Tabarrok for Marginal Revolution)

Using data on over one million Uber drivers and millions of trips, Cody Cook, Rebecca Diamond, Jonathan Hall, John A. List, and Paul Oyer show that female Uber drivers earn 7% less than male drivers. What makes this paper new, however, is that UBER’s extensive data lets the authors understand in great detail why the pay gap exists.

Male Uber drivers, like other males, drive a bit faster than female drivers, about 2.2% faster after controlling for experience and location. Since Uber pays by time as well as by distance the returns to speed are not very high and the difference in speed is small but overall this results in an increase in pay for males of about 50 cents an hour.

Overall, female and male Uber drivers behave remarkably similarly but small differences aggregated over large samples produce a small but systematic gender gap in wages of about 7%. The gap, however, is an artifact, a social construct that has no implications for “social justice,” drivers are treated equally.

What do you think?

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