Gender Paygap Loses to Science

Wed, Feb 7, 2018

I’d never thought I would say this but Uber, the ride hailing company, did something remarkably awesome. A group of five economists, two of which employed by Uber, two Stanford professors, and the chairman of the University of Chicago economics department have released a paper in which they report on their analysis of more than 740 million Uber trips in the States between Jan 2015 and Mar 2017, involving more than 1.8 million drivers.

The price a customer has to pay for an Uber ride is calculated by an algorithm that does not care about gender. The deciding parameters in making up the price of the fare are trip distance, wait time, speed, and surrounding circumstances like scarcity of available drivers. Even though there is no gender involved and the algorithm computing the fare is not just completely neutral in that regard but also does not care about things like whether someone works part- or full-time, funny enough there is still a gender pay gap. According to the paper, men earn an average of $21.28 per hour while women only earn an average of $20.04 per hour. The difference of $1.24 amounts to a gender pay gap of about 6%.

How can this be? There is no evil patriarchic society at play, the math is simple (the equation is actually part of the paper) and it does not discriminate against anyone. In their analysis, the writers name three main causes for the paygap that can be proven scientifically by the ride data they analyzed.

1. Men have more experience

The authors state that men and women learn at the same rate in terms of number of rides. They also state that for example wait times go down by 5% to 10% over 1500 rides of experience for both genders. This is because both men and women learn about which rides to reject and which to accept. But, according to the statistics, men learn more intensively per week of experience as they work longer hours. After a certain time interval, men will have accumulated more rides than women and thus more experience. With passing time, the percentage of men with a lot of experience will rise faster than the percentage of women. Also after six months, 77% of women will have quit working for Uber. With men, only 65% will have quit in the same period, leading to a further increase in high experience male drivers.

2. Men drive faster

For both genders, the speed goes down with experience as the drivers learn that congested areas are more lucrative than being out and about in the countryside. But, men still drive faster on average than women. They also drive longer trips and the combination of longer trips completed in less amount of time means more money. The authors mention studies that show that men are more risk tolerant than women, both in general and when driving in particular. This might explain the general tendency to drive faster. While mostly irrelevant in the daily life, in a drivers line of work speed of course pays off.

3. Men pick better spots and ride times

Possibly also a matter of experience, men tend to favour areas that have a lack of available drivers even though there is high demand. This leads to a bonus modifier for the fare in order to get more drivers into areas where they are needed the most. Men more actively seek out areas where there are high bonus factors available, leading to more income per trip.

What do we learn from this?

One of the most deciding factors is time spent working. If women prefer to work part-time they will accumulate less experience. Less experience usually means being less productive which then results in less pay. Either directly if the wage is coupled to hours worked or also indirectly because someone with more experience will move up the food chain faster. This holds true for both genders and this report shows that women do not need men to discriminate against them in order to be paid less. They can achieve this just fine by themselves. The question one should ask would be why the difference in work hours? Family? Lack of interest? Maybe being an Uber driver is not appealing to the general female populace, hell, I could hardly think of a more annoying job myself. It’s all in the eye of the beholder I guess.

But, if someone suggests that a person A with less experience than person B should be paid the exact same amount, they are actually the ones who are discriminating.

And since we men are apparently born with the need for speed and a greater risk tolerance, take it easy girls, this also means that we are far more likely to live life the squirrel way: Live fast, die young, and leave a flat patch of fur on the highway ;)