A recent study by Uber Technologies, Inc. (Uber) provides an illuminating example of the nuance required in interpreting gender wage gap numbers. In collaboration with researchers from Stanford and University of Chicago, Uber released the results of a research study on differences in earnings between female and male rideshare drivers. The analysis of earnings for over a million Uber rideshare drivers showed that, while male drivers earned 7% more, on average, than female drivers, the difference in earnings was wholly attributable to three factors related to driver experience and choices:
− Experience (learning-by-doing);
− Preferences over where/when to work; and
− Preferences for driving speed.
This study is particularly informative for federal contractors, as it highlights the importance of appropriately interpreting wage gap numbers. The study is unique in that two sources of potential discrimination are ruled out as explanations for the wage gap. On the employer side, the ride assignment and pricing algorithms are blind to the gender of drivers. On the customer side, riders cannot request a driver based on her/his gender. Thus, the 7% wage gap MUST be attributable to legitimate, non-discriminatory reasons.
This study highlights the complexity inherent in modeling the reasons for differences in compensation and underscores the need to be thoughtful about whether a "wage gap" reflects discrimination or legitimate, non-discriminatory factors that differ across similarly situated employees. As discussed by the authors in a podcast, the difference in earnings between male and female drivers was not due to discrimination or labor market biases, but rather a mixture of preferences and constraints on when, where, and how much drivers work.
Continue to follow the ever-changing state pay laws and wage gap news with upcoming DCI blog announcements.
By Keli Wilson, Principal Consultant; Julia Walsh, Consultant; and Kayo Sady, Associate Principal Consultant at DCI Consulting Group
