Rory Sutherland Rory Sutherland

Don’t abolish The Knowledge!

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issue 20 July 2013

Now that most taxi drivers use satnavs, should ‘the Knowledge’ be abolished? Shouldn’t we ditch the requirement that all London black cab drivers spend several years acquiring an insanely detailed knowledge of London before obtaining a badge?

In cabbie folklore, the model for the Knowledge was first suggested by Prince Albert. True or not, there is something German about the notion that every tradesman should have a qualification. And the test is teutonically stringent: more than 70 per cent of applicants fail or drop out. It demands that the prospective driver memorise 25,000 streets and 20,000 landmarks within six miles of -Charing Cross.

Now, useful as it once was, many people feel the Knowledge has been made superfluous by the arrival of cheap satellite navigation devices. I thought this. Conventional economic thinking, obsessed with ‘market efficiency’, would argue that the Knowledge is a ‘barrier to entry’ erected to maintain the scarcity of cab drivers, rather like a medieval guild. But as some people have begun to realise, markets need trust before they can be efficient. Medieval guilds existed for this reason. Trust is always more difficult in cities because of the anonymity they afford. Guilds offset this problem. If it is costly and time–consuming to join a guild, the only people who enter a trade are those with a serious commitment to a craft. And guilds are self-policing; the up-front cost of being admitted adds to the fear of being ejected. Could you really trust cabbies as you do now if they had gained their licences through attending three or four evening classes and shelling out for a second-hand TomTom?

Reciprocation, reputation and pre-commitment are the three big mechanisms which add to trust. You can use a small local firm which needs your loyalty.

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