HYRECAR INC. The following discussion and analysis of our financial condition and results of
operations should be read together with our unaudited financial statements and
related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our
audited financial statements and related notes for the year ended
Our Company
We operate in the car sharing marketplace for ride sharing through our
proprietary marketplace platform. The Company has established a leading presence
in Transportation-as-a-Service ("TaaS") through vehicle owners and institutions,
such as franchise car dealerships, independent car dealerships and rental car
companies, who have been disrupted by automotive asset sharing. We are based in
Business and Trends
We generate revenue by taking a fee out of each rental processed on our
platform. Each rental transaction represents a ride-sharing service driver
(each, a "Driver") renting a car from a participating car owner (each, an
"Owner"). Drivers pay a daily rental rate set by the Owner, plus a 15% HyreCar
Driver fee and direct daily insurance costs. Owners receive their daily rental
rate minus a 15%-30% HyreCar Owner fee. For example, as of
Daily Gross Revenue Example Daily Net (GAAP) Revenue Example
National Average Daily Rental Rate
Driver Fee$ 6 HyreCar Driver Fee (~15%)$ 6 Daily Insurance Fee$ 17 Insurance Fee (100% of fee)$ 17
Daily Gross Billing Paid by Driver
During the quarter ended
Gross billings is an important measure by which we evaluate and manage our
business. We define gross billings as the amount billed to Drivers, without any
adjustments for amounts paid to Owners or refunds. It is important to note that
gross billing is a non-GAAP measure and as such, is not recorded in our
consolidated financial statements as revenue. However, we use gross billings to
assess our business growth, scale of operations and our ability to generate
gross billings is strongly correlated to our ability to generate revenue. Gross
billings may also be used to calculate net revenue margin, defined as the
company's GAAP reportable revenue over gross billings. Using the definition of
net revenue margin and the example above,
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Table of Contents Non-GAAP Financial Measures Gross Billings
We define gross billings as the amount billed to Drivers, without any adjustments for amounts paid to Owners or refunds. Gross billings include transactions from both our revenues recorded on a net and a gross basis. It is important to note that gross billing is a non-GAAP measure and as such, is not recorded in our consolidated financial statements as revenue. Management believes gross billings provides useful information to investors and others in understanding our ability to generate revenue since our ability to generate gross billings is correlated to our ability to generate revenue. In addition, management uses gross billings to assess our business growth and ability to scale operations. Gross billings may also be used to calculate net revenue margin, defined as the Company's GAAP reportable revenue over gross billings. The presentation of the non-GAAP financial measures is not intended to be considered in isolation, or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Adjusted EBITDA
Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance and the operating leverage in our business, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our Board of Directors concerning our financial performance.We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team. Because Adjusted EBITDA facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes. We expect Adjusted EBITDA will increase over the long term as we continue to scale our business and achieve greater efficiencies in our operating expenses.
We calculate Adjusted EBITDA as net loss, adjusted to exclude:
? other income (expense), net; ? provision for income taxes; ? depreciation and amortization; ? stock-based compensation expense; and ? prior expenses expected to be settled in stock included in liabilities.
Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Furthermore, these measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statements of operations that are necessary to run our business. Thus, our Adjusted EBITDA should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.
We compensate for these limitations by providing a reconciliation of Adjusted EBITDA to the related GAAP financial measures, net loss. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view Adjusted EBITDA in conjunction with their respective related GAAP financial measures.
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