Stanford University, the University of Chicago and Uber Technologies, Inc. released a new study, entitled “The Gender Earnings Gap in the Gig Economy: Evidence from over a Million Rideshare Drivers,” on Feb. 6. The study was a product of a multi-year, first-of-its-kind research project into the existence of a gender earnings gap on the Uber platform and its underlying causes.
This study brought about two surprising conclusions. First, given the over one million driver sample size, there is strong evidence of “a 7 percent pay gap between male and female drivers.” The second conclusion is three main factors can explain the pay gap, all cutting along gender preferences: hours of experience, driving location and driving speed. These conclusions suggest gender preferences, rather than sexism, may impact wages and the pay gap.
WHAT IS THE GIG ECONOMY AND WHY IS IT IMPORTANT?
The study loosely defines the gig economy as “a collection of labor markets that divide work into small pieces and then offer those pieces of work to independent workers in real-time with low barriers to entry.” Examples include Uber, Lyft, Airbnb, Etsy, Udemy and others. In other words, the gig economy provides a market platform for highly flexible jobs to independent workers.
When considering labor markets driven by highly flexible, independent workers, the emerging statistics better represent one’s preferences, and therefore gender preferences, over traditional jobs.
The researchers noted, “Uber uses a gender-blind algorithm and drivers earn according to a transparent formula based on the time and distance of trips.”
THE STUDY RESULTS?
Evaluating Uber’s seven percent gender pay gap, the researchers concluded:
“The entire gender gap is caused by three factors: experience on the platform (learning-by-doing), preferences over where/when to work, and preferences for driving speed.”
Restated, males on average work more hours, generally work in higher surge locations and drive faster. Thus, men receive seven percent more because of their independent preferences and not because of Uber’s company policies.
WHAT ARE THE POLITICAL IMPLICATIONS?
While The Verge has responded with explicitly sexist policies, like a flat seven percent increase in pay for only women, there are two modest political implications.
This study allows commonsense a breath of fresh air. In the past 10 years, behemoth claims of structural sins have risen in the corporate world to stifle common sense. These massive claims began as accusations against one’s neighbors, then they became arguments against their neighbors’ assumptions, and now they have morphed into appeals to structural evils built by the ancestors of their neighbors. Each step has become more invisible than the previous and less able to be resolved. This study may bring us back into the homes of the Jones’ by asking the practical question, “Does Jack and Jill prefer to go up the hill?”
While this study does not represent the entire labor market, it gives fresh incite to the question, “Are there real gender preferences that have economic impact?” While politically consumed in searching for “structural” sexism, we seem to have forgotten about the people. This Uber study seems to be the first of its kind to measure the choices of real people, doing real work.
