Uber’s formula for paying drivers is causing a gender gap
Uber uses a master algorithm to determine how much money its drivers make—and women are ending up with less.
The gap: In a study released today of over 1.8 million drivers on the platform, women were found to earn $1.24 per hour less than men. Women also earned $130 less per week on average, in part because they tend to drive fewer hours.
The cause: The study, which was carried out by researchers at Stanford and Uber and has not undergone peer review, attributed the difference in pay to fact that male Uber drivers:
—Are more likely to drive in higher-paying locations
—Take on trips with shorter distances to the rider
—Chose to drive longer trips
All of these are variables in the formula Uber uses to calculate driver wages, and the study showed they all tilted in men’s favor (the study claims men earn $21.28 an hour, on average). Women also have higher turnover on the platform, and more experienced drivers tend to get higher pay.
Though it wasn’t covered in the study, one reason women may avoid higher-paying areas is that they don’t feel safe—they may opt not to drive late at night in certain places, for instance, or stay away from neighborhoods that are considered dangerous.
Closing the gap: The study shows there’s a persistent disparity in pay by gender, and Uber may have a hard time fixing it. Stanford economist Rebecca Diamond, one of the paper’s coauthors, says the researchers considered recommending taking speed out of the equation, for example. But as she says, “both riders and drivers would prefer to arrive at the destination sooner.”
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