Uber[1] is trying to defeat the gender pay gap by relying on an algorithm that has no idea whether drivers are men or women. But is it working? A recent paper studying more than a million drivers reached a conclusion: not so much. Men earn about 7 percent more than women do, as it turns out.
This could be taken as proof that -- just as Google[2] engineer James Damore wrote in a memo that got him fired[3] -- women are just different from men, and they do things differently at work. More likely, however, the situation is an example of our excessive trust in flawed algorithms that perform important functions, determining, for example, how work is rewarded.
The way Uber pays drivers, indeed, rules out some common causes of gender pay gaps. There's no negotiation involved, so there's no advantage from bargaining harder. There's no direct reward to working more hours per week (well, some bonus schemes do reward it, but the authors of the paper say they don't have a material effect on the data). And, since a driver only works when he or she wants to, Uber isn't reluctant to pay women as much as men because they tend to prioritise family: Everybody gets paid strictly for driving people around.
For the paper, the economists calculated the average total earnings of a driver per hour of availability on the Uber app in the US. Almost 1.9 million drivers, 27.3 percent of them women, provided the data between January 2015 and March 2017.
During that time, Uber changed how it paid its drivers, uncoupling their remuneration from the cost of the trip to the passenger in mid-2016. Now, in Chicago, a driver is paid...