Uber's Pay Formula for Drivers Favors Speed, Which Benefits Men

• February 06 2018
• Kristy Westgard

Uber has proven to be a flexible workplace for drivers who can set their own hours and routes, a system that some speculated would favor women. Instead, it seems the formula for compensating these drivers favors speed, which tends to be clocked by more lead-f…

Uber has proven to be a flexible workplace for drivers who can set their own hours and routes, a system that some speculated would favor women. Instead, it seems the formula for compensating these drivers favors speed, which tends to be clocked by more lead-footed men, a study shows.

The result is that male Uber drivers earn 7 percent more than females, according to an analysts of more than one million drivers for the startup. Other factors including experience and preferences over when and where to work, also contribute to the discrepancy, according to the study.

Researchers from Uber Technologies Inc. teamed up with fellow data scientists at Stanford University and the University of Chicago to look into the gender earnings gap. UberX and UberPOOL driver data from January 2015 to March 2017 was analyzed for relationships between the sex of a driver and the hourly earnings, average speed and number of trips executed through the app.

The research found that men are more likely to drive faster, log more working hours and pick more profitable locations to serve.

The earnings gap isn’t unique to Uber. Though the U.S. is making steps to remedy the disparity, women in North American made 28 cents less per dollar than men in 2017, according to a report by the World Economic Forum. Western Europe leads the pack with the narrowest wage gap of 25 percent, while on a global scale, women are tracking 32 percent lower to men in pay.

These numbers represent a traditional economy, but for the so-called gig economy, the dynamics of compensation are changing the playing field. Contract workers are not necessarily in danger of being offered a better or worse compensation package. For Uber drivers, pay comes down to how many drives you can fit into your working hours. And that requires skill, much like any game.

In the case of Uber, researchers concluded that men and women are at different stages of the app’s learning curve. Of the company’s more than 3 million active drivers worldwide, the driver base skews largely towards men, who have logged more time under their belts, giving them a better sense of where and when to drive for the most lucrative route.