Think about that. In a labor market that is fully mathematical (wages are based on a gender-blind algorithm) where the work is seemingly identical (an Uber ride is an Uber ride), there is still a 7% gap in hourly wages between men and women.
This shows us why “solving” the gender pay gap is going to be so hard.
The data source is a paper by Uber and some renowned economists, based on millions of rides and drivers. It’s worth a read. If you prefer to listen, Freakonomics Radio just released a great conversation about it:
Given the remarkable depth of the data, this is a unique opportunity to dig into the workings of a real labor market in the gig economy. In theory, such a market would eliminate the gender pay gap (and one of the authors even hypothesized it might tilt the gap in favor of women).
The authors find that the 7% gap is caused by three things, which may ultimately be caused by one underlying issue. The three causes:
- Experience on the platform – men have generally been driving on Uber longer, and per-hour wages increase with the cumulative number of rides given.
- Where/when to work – men tend to drive in more lucrative locations (like airport runs) and times
- Speed of driving – men drive 2% faster, and since drivers earn by completing rides this makes men more productive, per hour
The authors and some gender pay gap experts conclude that these specific factors ultimately reflect different preferences (in the economic sense) for work between men and women. Refer back to my previous post on this matter. Ultimately, there are underlying factors – societal, cultural, perhaps genetic, we don’t know – that are different about men and women, and these factors drive the gap in pay.
This is what will make closing the gender pay gap so challenging.
We can and should remove discrimination, but even in the absence of discrimination a gap may remain. The findings of this study describe how the degree to which works fits into our life shapes our earnings capability. This, in turn, points to deeper challenges we face as HR practitioners in evaluating the gender pay gap. We can do our part, but it may not be enough.
Kudos to Uber, even with its checkered past on gender equality, for taking this research on and making it publicly available.