Male Uber drivers earn 7% more than female drivers, and economists think there are 3 reasons why
- A new paper finds male Uber drivers earn 7% more than female Uber drivers.
- There are three key reasons why: men are less likely to quit the platform, they drive in more lucrative areas, and they drive faster.
- In the US, women earned 82% of what men earned in 2016.
When John List, the chairman of the economics department at the University of Chicago, started studying the differences between what male and female Uber drivers earn, he didn't expect to find much of a gap. If anything, he expected the pay gap would slightly favor women.
But in a new paper, List, along with four other economists, explains why he was wrong.
The five economists - two of the other four work at Uber and two work at Stanford - found that male Uber drivers earn about 7% more per hour than female Uber drivers, on average.
That's according to their analysis of more than 120,000 Uber drivers in Chicago, about one-third of whom are female, from January 2015 to March 2017. (The authors compared the Chicago data set to a national data set of more than one million drivers and yielded similar conclusions.)
List and Rebecca Diamond, another co-author, from the Stanford Graduate School of Business, appeared on an episode of Freakonomics Radio to discuss their findings. They said three factors can explain the entire wage gap.
Interestingly, gender discrimination doesn't appear to play a role here - the authors found that riders were just as likely to accept a ride with a female driver as they were to accept a ride from a male driver. And Uber doesn't take into account a driver's gender when assigning fares to rides.
Drawing from the Freakonomics episode as well as from the paper, we've summarized the three factors below:
1. Men drive in more lucrative pay areas than women, and that accounts for about 20% of the wage gap.
For example, they complete more trips to and from the airport than women do. Men are also more likely to drive the overnight shift.
2. Men stick around on Uber longer, which helps them get savvier about which trips to accept and which to reject. That explains about one-third of the wage gap.
Not only are women more likely to leave their job at Uber after six months, but men also make about 50% more trips per week than women do.
3. Men drive just 2% faster than women, which allows them to make more trips. That explains about half the wage gap.
According to data from the US Census Bureau, women earned just 82% of what men earned in 2016. As Business Insider's Rachel Gillett reported, one potential reason why is that women pay a high cost for the ability to work flexible hours.
You might think that the gender wage gap would shrink in the so-called "gig economy" because workers can choose their own schedules. This new paper suggests otherwise.