Gig Economy Fails to Equalize Gender Pay Gap

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The gig economy was supposed to deliver a variety of benefits. Workers could work when and as much as they wanted while maintaining a work-life balance that made them happy. Would that it were so.

Economist Laurence Michel published a study in May that looked at the ride-sharing service Uber and concluded that the company’s drivers were earning less than $12 an hour after commissions, booking fees and expenses.

A new study by economists at Stanford and the University of Chicago shows that the gig economy has even failed to eliminate the pay gap between men and women, based on a study of Uber workers. Women who drive for Uber earn 7% less per hour than men.

The study’s authors show that the gap “can be entirely attributed to three factors”:

Experience on the platform (learning-by-doing)

Preferences over where to work (driven largely by where workers live and, to a lesser extent, safety)

Preferences for driving speed.

Almost half the difference in pay was due to the fact that men simply drive faster than women. Men are also more likely to have been on the job longer and are more willing to drive in areas with high crime rates than are women. The researchers’ conclusion:

[T]here is no reason to expect the “gig” economy to close gender differences. Even in the absence of discrimination and in flexible labor markets, women’s relatively high opportunity cost of non-paid-work time and gender-based differences in preferences and constraints can sustain a gender pay gap.

The study’s findings line up with earlier studies of gender pay inequality that show self-employed women make about 15% less than men and women who are independent contractors earn 21.5% less than men. The gig economy may be better, but it’s not yet equal.