Uber has not had the strongest PR year, especially when it comes to women’s rights. The company has been embroidered in controversy and legal suits that ultimately helped dethrone Travis Kalanick from the Uber throne.
So when I heard that the company had invested in a Stanford led study to analyze the gender pay gap in the rideshare market, I braced myself for the worst.
What Stanford found was actually, not as egregious as one would have thought. The study did find that women are on average paid 7% less than men, but that number is considerably less than the average of 12% across all jobs in America.
You can attribute these above average gender pay figures to a market that TNC’s like Uber, Lyft, Via, and Juno tightly control. Drivers are of course paid a fare according to a completely fixed and non-negotiable formula that is consistent across a particular city. In the rideshare market, there are also significantly fewer instances of discrimination than in the broader job ecosystem.
In the rideshare market, discrimination can only come in the form of rider cancellations, and only about 2.1% of the gender pay gap is a result of passenger cancellations.
So the question then turns from, what is the pay gap, to what is causing the pay gap?
What is causing the gender pay gap?
One of the biggest reasons for the gender pay gap can be summed up in the table below:
Women drive for far shorter amounts of time than men.
Driver attribution has been a problem for rideshare companies since their inception. Only about 68.5% of all drivers continue to drive for these rideshare companies for more than six months. However, as you can see in Table #1, 76.5% of women churn out in less than 6-months while 65% of men churn out in less than 6-months.
This disparity in driver attribution is a huge piece of the gender pay gap in the rideshare market.
Why?
Because the women drivers on the road today are on average less experienced than male drivers.
This is extremely important because as we know, when a driver becomes more seasoned, they become better drivers. It takes time to learn where the hotspots are in a city, when to drive those hotspots, and how to engage with passengers to maximize earnings. In fact, this Stanford study found that a driver with 2,500 hours of driving experience is likely to make $3 per hour more than a driver with no experience.
Figure 4:
Women also on average drive less hours per week and take less trips per week than male drivers. On the surface, this doesn’t appear to be something that would decrease hourly earnings, in fact, drivers that work fewer hours tend to have higher hourly incomes because they can cherry pick when they drive. However, when we analyze the gender pay gap we can see that this actually just further decreases the amount of experience a women can get behind the wheel. As we see in Figure #4 above, less hours behind the wheel results in a decrease in effectiveness and hourly pay.
Men were more likely to drive in areas and during times in which pay is higher
Another huge reason for the pay gap is when and where women choose to drive.
Understanding where and when to drive is a skill that comes with experience, however, if you are unable to work at certain times and in certain locations than no matter how experienced you become, you won’t reap those benefits.
We are most likely seeing this with women that avoid driving at lucrative times like late-nights when you’re almost guaranteed to find intoxicated passengers. While TNC’s are generally very safe for drivers, many women are not comfortable driving intoxicated strangers in their vehicles.
Another possible time some women may be missing out on is the morning and afternoon rush. Single mothers, or mothers that take on the responsibility of getting their kids to and from school, will be unable to work the early mornings or mid-afternoons that tend to see frequent surges and steady demand for rides.
It should be noted that we see a significant amount of men that also are unable to drive during these early mornings and late afternoons.
Men drive 2.2% faster than women working for Uber.
The final reason for the gender pay gap surprisingly is all about driving speed.
Men tend to be faster drivers on average than women. This is a well documented fact that you can see by comparing how women and men pay insurance. Not only will men drive faster, but men also tend to take greater risks when out on the road.
This more aggressive driving style can actually be an asset for men because as we know, drivers are paid more by the mile than the minute. So if you can complete trips faster and pack more trips into an hour, then you’ll likely see a greater amount of profits.
How can the pay gap be tightened?
The gender pay gap among rideshare drivers is not huge, but we would like there to be no gap at all. So it’s important to think about how the pay gap can be tightened. We see three main possibilities:
- Shorten the skill ramp up time
- Help women drivers move faster by avoiding traffic
- Help women drivers find profitable routes whenever they drive
Shorten the ramp up time.
The study shows that the average rideshare driver, whether they are a man or a women, learns when and where to drive at the same pace. After about 1,500 rides, your wait times will decrease about 5% – 10% which means your income will start to increase. Drivers can decrease that ramp up time by knowing when and where to drive from the onset of their driving careers so they are getting more trips sooner.
Women can start to rapidly decrease their wait time by quickly understanding when to drive airports.
Many drivers, men and women alike, will spend a significant amount of time waiting in the queue at a airport. Instead of wasting time in a line that is too long, women can check and see how many drivers are in a airport queue before they set off.
This can quickly result in a decrease in overall wait time and increase in the number of trips given per hour.
Help drivers move faster by avoiding traffic
A surprising 48% of the gender pay gap was attributed to driving speed. However, the study did not find that drivers start to drive faster as they become more seasoned.
This is likely because drivers find that more lucrative areas tend to be more congested. While this can be true, it isn’t always.
By using Gridwise traffic alerts in conjunction with the events feed, drivers can better understand where they could be driving that will help them avoid traffic instead of run right into it.
By avoiding heavy traffic while still driving high demand areas, women drivers can chip away at the speed advantage men appear to have.
Help drivers find profitable routes to drive no matter what time they are driving
Being able to find profitable rides whenever you drive is key for any rideshare driver. While there are certainly times and places that are undoubtedly more lucrative, a savvy driver can find great routes whenever he or she drivers.
Drivers can of course use Gridwise’s event feed to pick and choose when they want to drive and where they want to drive. For instance, if we can see that a college basketball game is starting at 5:00 pm and ending at 8:00 pm on a Tuesday, we can reasonably position ourselves in a residential area where college students tend to live in order to be in position for rides to the event venue.
We can then check out Gridwise’s airport graph to see if there is a surge at the airport. If there is a surge of departures airport, we can set a geo-filter to a hotel, and find a ride that takes us near hotels where business people or tourist will be leaving to catch their flights.
From there, we can get a passenger from a hotel that is heading to an airport, and then decide if there is enough airport demand to justify waiting for a ride at the airport by checking the airport graphs.
Otherwise, we can just head back toward where the original game was being played and pick up passengers headed home.
This is possible even on a slow Tuesday if you know what’s going on around you in your city.
Is it a big deal?
Uber’s gender pay gap is not huge, and it is not discriminatory in nature according to Stanford’s research, however, we can always do better. At Gridwise, we hope to help alleviate this gap by giving all drivers the tools they need to be successful.
