Uber reportedly used an algorithm to pay new hires less — reinforcing a gender pay gap

Key Points
Travis Kalanick, Co-founder and CEO of Uber.
David Orrell | CNBC

Uber used an algorithm to optimize its compensation offers to new hires, in an effort to protect existing shareholders and save money, according to The Information.

But the algorithm both reinforced existing gender pay gaps, and led to uneven pay for similar roles — which created turmoil inside the company, unnamed sources told The Information in a report published on Wednesday.

More than half of Uber's new hires last year took a pay cut to join the company, The Information reported, many hoping the value of their stake in the start-up would grow as it rapidly expanded. But Uber's share prices have stalled, and executives have reportedly become more aggressive in keeping existing shareholders from having their stakes diluted.

The algorithm system is now being altered, according to The Information. Uber was not immediately available to comment on the report.

The revelation of the algorithm comes as the company is investigating accusations of sexual harassment and gender bias within the company.

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