Uber compensation algorithm pays new hires less

Occurred: June 2017

An algorithmic compensation system created and operated by Uber paid new recruits less, led to uneven pay across similar jobs, and reinforced existing gender pay gaps, resulting in turmoil across the company.

According to a report in The Information, Uber introduced the system to reduce the amount of equity being given to new hires and to save money. It followed a so-called 'market of one' philosophy in which each offer is tailored to a specific candidate based on his or her personal circumstances. 

But by producing a low minimum offer for candidates, including women who typically make less than men in similar jobs, it  reinforced existing gender biases. 

The system, which was said to have saved Uber several hundreds of millions of dollars of equity, was later altered. 

Operator: Uber
Developer: Uber

Country: USA

Sector: Transport/logistics

Purpose: Determine pay/compensation

Technology: Pay algorithm
Issue: Bias/discrimination - gender; Fairness

Transparency: Governance

Page info
Type: Incident
Published: September 2023
Last updated: November 2023