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Uber’s chief economist talks drivers’ wages, gender wage gap

Jonathan Hall discusses findings of a six percent gender wage gap in Uber drivers

On Thursday in Jordan Hall, Uber’s chief economist Jonathan Hall discussed his work at the company, touching on findings of a six percent gender wage gap in Uber drivers and how a unique market like Uber’s functions.

As Hall pointed out, Uber’s “gig economy” is notable because drivers don’t have a set hourly wage in the way that other workers in different markets do. According to Hall, the average wage rate of an Uber driver is $20 per hour, although that number usually — and somewhat inexplicably — drops a bit during January and then rises in February.

Moreover, Uber’s labor market is entirely open: drivers can leave as soon as Uber’s product becomes slightly worse than any other product, like Lyft.

Hall also mentioned studies that the economics team at Uber conducted on the gender wage gap in drivers — a fact that, on its face, might seem unaccounted for.

“You might think that assuming the algorithm is completely gender unaware — which it is — you might think men and women earn the same amount,” Hall said.

However, the data shows that, in the U.S., Uber drivers face a six percent gender pay gap. Hall said this can be explained by three factors; firstly, male drivers prefer late night hours, rides which are potentially priced higher on average. Secondly, women are more likely to both work fewer hours per week and leave the platform altogether — and according to Hall’s research, drivers that have more experience tend to make more money overall. Finally, men, on average, drive two percent faster than women, meaning that they complete more rides per hour.

According to Hall, if those three factors — the time of the drive, the experience of the driver, and the speed of the ride — are controlled for, the gender gap shrinks to zero.

At various points during the lecture, students brought up the possibility of drivers unionizing to increase wage rates.

In response, Hall said that Uber drivers are unable to unionize. Because drivers are independent contractors and can easily switch from working to Uber to working for another company, such as Lyft or Doordash, employment law does not apply to them, Hall argued.

In terms of Uber’s future, Hall said that he is hoping that the app can provide drivers with greater flexibility on where they want to drive without enabling discriminatory practices.

“What we want to build is a product that drivers can filter trips … I think it should be our first priority,” he said.

Hall’s talk was part of the class Econ 5, a one-unit lecture series that hosts a different economics professional every week. Rebecca Toseland, a Stanford Institute for Economic Policy Research research scholar and an organizer of the class, hopes that during the class, students can gain a broader understanding of what opportunities are available in the field of economics, and potentially be inspired to study economics.

And while Hall said he doesn’t believe in career advice — most career outcomes, he said, are random — he did say he enjoyed his experience at Uber because he started as the company’s first data analyst, when the company was so small, so he was given the autonomy to decide what he wanted to do. Hall has worked at Uber for the past five years, and in his time there has watched the company expand from a small startup of just over 100 people to over 20,000 people.

“Find a small place where you can make big decisions,” Hall said.

 

Contact Adesuwa Agbonile at adesuwaa ‘at’ stanford.edu.

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