HyreCar Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the HireCAR, Inc. 2022 Third Quarter Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. If you have a question, please press the star key followed by 1 on your touch-tone phone. If you would like to withdraw your question, please press the star key followed by 2. If you're using speaker equipment, please lift the handset before pressing the keys. The earnings press release accompanying this conference call was issued at the close of the market today, November 14th, 2022. On our call today is HireCar CEO, Joe Farnari, and interim CFO, Eduardo Iniguez. I will now turn the call over to Scott Arnold of CoreIR, the company's investor relations firm. Please go ahead.

Thank you, Operator, and welcome everyone to HireCar's third quarter 2022 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 HireCar 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. They 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 out of the substitute for or in isolation from our GAAP results. The reconciliation of GAAP to non-GAAP results will be found in the earnings release and supplemental materials that were filed with the SEC and can also be found on the investor relations portion of the company's website. Now, I would like to turn it over to Joe Finari, CEO.

Great. Thank you, Scott. Welcome, everybody, and thank you all for joining today's call. I am pleased to report that HigherCard experienced another strong quarter across our operations. Our financial performance remains robust, with revenue up $600,000 from $9.7 million to $10.3 million year-on-year, and down just slightly from our record second quarter revenue of $10.5 million, driven by an increase in price per rental day and increases in first-time rentals. We are very pleased with these and numerous other growth trends, which continue to gain momentum. Gross profit margin came in at 37.5%. seven points higher than the same period last year, and beating the higher end of the guidance range we gave last quarter. Gross profit continues to expand because of the proprietary risk underwriting measures we've adopted in prior quarters. These measures combined with diligent claims oversight have us trending toward 40% gross profit margins by end of year. Driver demand continues to benefit from macroeconomic tailwinds, cities reopening, resurgent travel, and more broadly, a continued shift in consumer spending to services. We've seen these macro trends continue to positively impact hire cars business in the fourth quarter, with October coming in as our best month ever for total company gross bookings and revenue. It's important to note that we realized this momentum in October without the accretive effects of increased car supply from AmeriDrive, or our recently deployed warehousing line with Credit Suisse. We expect incremental supply from the warehousing line to accelerate steady-state average daily paid rental days in Q4, which are trending between 3,700 and 3,900 ADRs. Clear line of sight on our growth trends have been made possible from HireCar's much-anticipated closing of a $100 million warehousing line with AmeriDrive, Credit Suisse, and Medalist Partners. As part of the warehousing line agreement, CES and Metalyst assumed a combined 12% warrant stake in HireCar, which is the beginning of a long-term partnership that we expect to deepen as we scale supply and expand financial offerings for our owner community. I'm happy to report that our fleet operator partner AmeriDrive has already deployed over $20 million in capital from the warehouse facility. resulting in the purchase of over 1,200 new cars dedicated to the higher car platform. In parallel with the purchase, AmeriDrive is aggressively expanding its geographic footprint from two metropolitan areas to five metros and 11 locations, up from six just in Q3. We expect a portion of these cars to be accretive in Q4 as they are infleated, with the bulk of inventory being layered in through the first half of Q1 2023. Conservatively, We expect AmeriDrive to add 2,000 additional vehicles over the next six to nine months and doubling total cars purchased over the next 18 months. A portion of purchased cars will be used to replenish supply that is no longer suitable for hire car or gig platforms. So we expect 7,000 net new cars to be available across approximately 14 metros and 40 locations by the end of 2023. Optimizing fleet operations with a focus on rapid infleeting is a priority for both HireCar and AmeriDrive, and we continue to leverage AmeriDrive COO Daniel Florence's background as former COO of Six North America and HireCar's in-house expertise to continue streamlining and scaling our growing operations. Now moving on to demand. Driver demand for HireCar's vehicles continues to be strong. with attractive economics for drivers. The driver can rent a car on our platform for $59 per day on average in the US and make $36 per hour driving 20 plus hours on the Uber platform as highlighted in Uber's recent third quarter earnings call. Depending on location and strategies for leveraging gig platform promotions, drivers have stated that they can earn up to $50 per hour. Across public gig companies in Q3, Uber, Airbnb, and DoorDash saw strong consumer demand for services with corresponding increases in the need for drivers from gig mobility companies. Rising inflation has also made participation in the gig economy increasingly attractive as drivers seek to supplement their income with part-time or more flexible working arrangements, and hire cars offerings become an ever more attractive, cost-effective solution in this price-sensitive economy. This continues to validate the driver's opportunity for success with hire car. Hire car has never seen stronger demand with signups up 14%, even with lower cost of customer acquisition. Advertising spend was down 21% and cost per booking down 24% year on year, reflecting the impact of our ongoing operational refinements amidst improved brand awareness across the conversion funnel. To counteract the impact of higher operational expenses for drivers, the most painful being gas prices, HireCar has also pivoted to reducing the cost of rentals at the point of sale through promotions, driving increases across background checks, rental applications, and first rentals year on year. We are also in the process of finalizing a strategic partnership with the largest rideshare provider in the world as our warehousing line unlocks the next chapter of HireCar's growth. The proposed expansion includes over 30 additional geographies, and the rollout mirrors AmeriDrive's go-to-market plan over the next 18 to 24 months. This deal will allow us to directly access and provide vehicles to our target segments, drivers who are looking to rent vehicles across all gig platforms, including Uber, Uber Eats, Dash, Instacart, Drizzly Eats, and Amazon Flex, just to name a few. On the supply side of our marketplace, hire cars operations improved significantly year over year, reflecting improvements in targeting and sales practices, as well as internal operations processes. Compared to the same period last year, the average number of median days for an owner to have their first vehicle approved fell from six days to one day, while the average time it took for a vehicle to receive its first paid rental decreased by over 60%. The percentage of all owners approving rentals and the number of rental applications increased 8% and 3% year-on-year respectively, and midsize fleets performed particularly well with rentals applied and approved for these owners, ours increasing 26% and 20%, while vehicles rented from this owner segment also increased 15% year-on-year. For our largest fleet operators, utilization remained high, averaging over 80 percent for the quarter. These improvements have also been realized despite introducing vehicle make and model restrictions based on our internal risk analyses. Increased vehicle selectivity to better match supply with demand complements a company-wide initiative focused on driver underwriting that we anticipate will improve the quality of the marketplace and drive retention of vehicles and drivers. We see our recent strong performance as indicative of the impact of supply of vehicles on platform for a number of reasons. One, we have maintained organic momentum into Q4 with strong utilization rates and record rental days in October. Two, used car prices are stabilizing and reportedly declining, making it easier for our owners to source vehicles while improving the economics of renting these assets. And three, we've set the hire car platform up for success through a laser-sharp focus on execution in the third quarter and into the fourth quarter across technology, internal processes and policies, and an optimized org structure. With a steady and growing supply of cars from all of our fleet partners, we will be able to fully take advantage of system-wide demand increases from drivers. Because of these tailwinds, we anticipate strong revenue and margin performance in Q4, as we continue our organic growth trends in addition to AmeriDrive's incremental supply. Finally, we have continued to focus on increasing the supply of electric and hybrid vehicles to address growing demand from our driver base and rideshare and delivery platforms. Record high gas prices paired with higher driver payouts and rider demand for these more efficient vehicles has made the availability of electric and hybrid options on our platform another priority. 62% of all electric vehicles or EVs on the platform have been added in 2022, with the average daily rate increasing 20% between 21 and 22. EVs available on the platform increased over 15% in Q3 22 versus Q3 21. And EVs rented on the platform increased 126% in the third quarter of 22 versus the third quarter of 21. The average listing price of an EV on the platform is 24% higher than an ICE vehicle, while the average rental rate on an EV is 21% higher than an ICE vehicle. This reflects not only higher quality EVs on the marketplace, but also a greater willingness to pay for these cars due to the increase in gas prices and the availability of EV incentives where drivers can make more for each ride versus an ICE vehicle. EV rentals have continued to gain momentum into the fourth quarter, with the total number of EV rentals in October equaling the total number of EV rentals for all past quarters combined, and with significantly higher daily rates over the same period. We are particularly pleased with the progress we have made with our Spring 3 EV partnership, which has allowed our owners to more easily acquire EVs for the HireCar platform. The number of orders through this program was 1,400% higher and Q322 versus Q321. We anticipate several EV-related benefits to our platform with the passage of the Inflation Reduction Act from August 22 and the nearly $400 billion in planned energy and climate spending. Effective January 1, 2023, the new law eliminates the 200,000-unit sales cap that currently disqualifies OEMs and consumers receiving a per vehicle tax credit of $7,500. Beginning January 1, 2024, used electric vehicles will become eligible for up to a $4,000 tax credit. And industry trends suggest EV models will double by 2024. And GM has predicted they will only sell zero emission vehicles by 2035. In anticipation of the significant growth in EV supply on hire car, We have launched several key initiatives to build an EV ecosystem specific to car sharing, from financing and acquisition of EVs to maximizing utilization and accessing or building charging infrastructure. We are excited to push the boundaries of how higher car can continue to generate benefits for big drivers and platforms while reducing our carbon footprint. With that, let me turn the call over to Eduardo, who will discuss our financial results for the third quarter.