HyreCar Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the HireCAR, Inc. 2021 Third Quarter Conference Call. During today's presentation, all parties will be in the listen-only mode. Following the presentation, the conference will be opened for questions. If you have a question, please press the star followed by the 1 on your telephone keypad. If you would like to withdraw your question, please press the star followed by 2. If you're using speaker equipment, please lift the handset before making your selections. This conference is being recorded November 9, 2021, and the earnings press release accompanying this conference call was issued at the close of market today, November 9, 2021. On our call today is HireCar's CEO, Joe Frenari, CFO Serge DeBach, and Scott Arnold, Senior Managing Partner of Core IR. I will now turn the call over to Scott.

Thank you, Operator, and welcome everyone to our 2021 Third Quarter Earnings Conference Call. Before we get started, I'd like to take this opportunity to remind you that during this call, we will be making forward-looking statements within the meaning of federal securities laws regarding higher car incorporated forward-looking statements include but are not limited to statements that express the company's intentions, beliefs, expectations, strategies, predictions, or any other statements relating to its future earnings activities, events, or conditions. These statements are based on current expectations, estimates, and projections about the company's business based in part on assumptions made by management. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those projected or implied during this call. in particular those described in our risk factors included in our documents that the company files with the U.S. Securities and Exchange Commission. In addition, such statements could be affected by risks and uncertainties related to factors beyond the company's control. You should not rely on our forward-looking statements as predictions of future events. All forward-looking statements that we make on this call are based on assumptions and beliefs as of today, and we undertake no obligation to update them except as required by applicable law. Our discussions today will include non-GAAP financial measures. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. A reconciliation of GAAP to non-GAAP results will be found in our earnings release and supplemental materials, which will be furnished with our Form 10-Q that will be filed with the SEC and will also be found on the investor relations portion of our website. Now I would like to turn it over to Joe Frenari, CEO.

Thank you, Scott. and welcome all to our third quarter 2021 conference call. I am pleased to report that in the third quarter, net revenue increased 43% to 9.7 million, up from 6.8 million in the same period of 2020. Robust demand from driver segments drove over 8,000 new unique drivers to pick up a car on our platform, which is a 49% year-over-year growth rate. Take rates have increased significantly as robust driver demand and fewer driver alternatives were creating incremental margin pickup in our daily rates. Our dynamic pricing model brought take rates up to $29 per day in Q3, up 7% from Q2. Because we've invested in building a robust data environment and flexible technology stack, we were able to implement these changes relatively quickly. We anticipate take rates growth through the rest of the year as the dynamic pricing model learns and iterates for risk and reward. Importantly, our gross margin improved from Q2 this year back to plan, and we succeeded in meeting financial and cost goals that make us stronger even as we continue to invest for the larger number of vehicles we are helping to provide to gig and delivery drivers. This progress that we made over the quarter and the week since the quarter has been significant. At the end of last week, we announced a partnership with Ameridrive and Cogent Bank to help drive vehicle supply to our platform. Under the terms of the agreement, Cogent has agreed to expand its lending capacity to allow our fleet partner, Ameridrive, to continue to build its fleet of gas-powered and electric vehicles available on our platform. We believe these types of relationships with fleet partners will help us continue to meet the increasing driver demand through the hire car portal. Cogent has been a tremendous partner to AmeriDrive and HireCar, and we look forward to continuing that relationship. In addition to our primary purpose to match drivers with car supply, we have invested in helping the larger mobility as a service ecosystem, leveraging our access to the financial markets to help our vehicle partners access financing sources. We realize that we succeed when our partners succeed, and the Cogent line is one of the tools. Last month, the team attended two significant industry conferences related to vehicle financing. SFIG, the Securitized Products Association's major West Coast conference, and the Auto Finance Summit. The Auto Finance Summit was headlined by HireCar's Brian Allen, and Auto Finance highlighted HireCar as one of the automotive retail opportunities taking the auto finance industry by storm in 2021. As previously mentioned, we've engaged a large investment bank to help hire for business customers access warehousing financing lines. These warehousing lines will give our partners direct line of sight to growing the platform's available vehicle supply to tens of thousands of cars. And it's important to note that for every 10,000 cars actively rented on our platform, we estimate approximately 90 to 100 million in revenue to hire car. And secondly, I'm extremely proud to announce another major milestone for hire car. We have signed an official vehicles partnership with Uber. This vehicle rental strategic relationship will allow us to work directly with drivers and delivery people using the Uber platform to find and acquire rental vehicles. The partnership is initially focused on adding electric and hybrid vehicles to our platform. which is Uber and HireCar's focus on environmental sustainability in the automotive sector. We will roll out this partnership in various cities from Atlanta to San Francisco, and Uber app users can now expect to see our listings in the vehicle solutions section on the Uber app. Potential customers will be able to rent directly from Uber's platform and move more rapidly through the approval to pick up and driving process. We anticipate this partnership should increase the retention rates of drivers improve our driver quality, and reduce our marketing costs. HireCar will oversee promotion and other business activities to jointly create and market a vehicle solutions program for drivers and delivery people using the Uber platform. Pairing drivers with available cars will be seamlessly integrated, and as we integrate a single sign-on solution, rentals will flow directly through Uber's applications. We expect to see increased volumes as a result of our partnership, and while we are aware the other rental car providers are also in the mix, we believe that HireCar's dynamic and attractive pricing structures will attract new drivers to our platform, and that over time our share of market on the Uber platform will increase. In addition, with our adoption of dynamic pricing structures, we continue to focus our efforts on improving margins And with some of the other changes we are making as a business, I believe we are on track for our goal of 40% gross margins by the end of 2022. Recent work that Surge has done anticipates cash flow break even at 6,000 to 6,500 vehicles rented on the platform. Now moving to operations, an important way to ensure that we keep our margins higher is to keep our expenses down. And that is among the reasons we are so pleased to have had Serge Dubac join us as CFO in July of this year. Serge's experience in finance at Ford, Amazon, and Liberty Mutual, as well as his focus on maintaining a healthy operational budget gained from his time at Deloitte and PwC, have been central to helping our company improve many financial and planning operations over the past four months. And we are extremely fortunate to have had him join the team. He has been a key driver in analyzing and improving our claims processes, with our recently implemented TPA partner, Sedgwick. Conversations with our partners make it clear that the market will continue to grow and HireCar intends to be the leading vehicle supplier for the gig economy. In the near term, our partners are working through a tighter vehicle purchase market due to the shortage of new and used cars at scale. We believe this market anomaly should only impact the short-term pace of adding vehicles. We do not believe it will impact the growth of our supply going forward as these market anomalies abate. As you have seen from recent news reports from other companies in the rental markets, the total addressable market has been calculated between 300 and 500,000 vehicles. Even if we achieve our goals of 16,000 gross cars verified to the marketplace in 2022 and 50,000 by 2025, we will still be a small part of this market. but we will continue to innovate and be the platform that appeals to the widest range of gig drivers, and our partner's fleets will consist of both EV and ICE vehicles, providing the vehicles our customers want where they want it. With that, I'd now like to turn the call over to Serge Dubac, our Chief Financial Officer, to walk us through some key financial elements from the third quarter.