Farmers who access services have, so far, only indirectly benefitted from the new digital tools, because they still relied on “analog” solutions - booking agents and phone calls - rather than a smartphone app to request services. Our results show that the Uber for tractor models have indeed the potential to reduce transaction costs for service providers, in particular the owners of several tractors, by enabling the monitoring of tractors and operators through GPS devices. For the empirical analysis, a mixed-methods approach was applied involving approximately 400 respondents and comprising net-maps (a participatory mapping tool), focus group discussions, interviews with tractor owners and other stakeholders, and a survey among farmers. A transaction costs economics framework was developed to identify how Uber for tractor tools can, in theory, influence the attributes of service hire transactions and, thus, reduce transaction costs. How does it work in practice? And what is its potential to reduce the transaction costs of tractor service provision, both for tractor owners and for smallholders who use tractor services? To answer these questions, we present case studies of two companies that apply digital tools in support of tractor hire: Hello Tractor in Nigeria and EM3 Agri-Services in India. While widely praised, Uber for tractors has not yet been rigorously analyzed. One such tool is Uber for tractors, which aims to enable farmers to access tractor hire services in a way that is deemed similar to the Uber service for ride-hailing.
Digital tools hold great promise to promote agricultural transformation and benefit smallholder farmers in the developing world.
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