Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the HyreCar Inc. 2022 first quarter conference call. During today's presentation, all parties will be in a listen only mode. Please note this conference is being recorded. Following the presentation, the conference will be open for questions. If you have a question, please press the star followed by the one on your touchtone phone. If you would like to withdraw your question, please press the star followed by two. If you're using speaker equipment, please lift the headset before making your selection. The earnings press release accompanying this conference call was issued at the close of the market today, May 16, 2022. On our call today is HyreCar CEO Joe Furnari, President Brian Allan, and CFO Serge De Bock. I will now turn the call over to Scott Arnold of Core IR, the company's investor relations firm.
Please go ahead.
Thank you, operator, and welcome everyone to HyreCar's first 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 HyreCar Inc. 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 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 Furnari, CEO.
Great. Thank you, Scott, and welcome everybody. I am pleased to report that HyreCar had a strong start to 2022, building off the momentum from a record year in 2021. We saw strong car share demand to support gig-based services, and despite persistently elevated prices in the used car market, we also maintained available supply on the platform with a substantial increase in new owner accounts. We are now the only platform crowdsourcing vehicles for gig drivers in the United States, and as a dedicated provider of drivers for rideshare and delivery platforms, HyreCar is uniquely positioned to help these platforms cover anticipated driver shortages as demand returns to pre-pandemic levels. March of this past quarter was our strongest revenue month in company history, and that momentum has continued through April and May. We anticipate macro tailwinds to continue to drive revenue and ADRs higher.
As used car prices level off, car supply is anticipated to flow from our warehouse initiative. Demand continues to grow for gig services, and we continue to build the HyreCar ecosystem. HyreCar's revenue grew 28% year-over-year to $9.6 million for the quarter. Driver demand for cars remained strong with total driver signups increasing 10% quarter-over-quarter in line with the increasing consumer demand for rideshare and delivery services observed by platforms such as Uber and Lyft. Reflecting the higher year-over-year growth in mobility versus delivery bookings observed by Uber, HyreCar also saw a shift in driver by service type with a 5% decrease in percentage of rental days attributed to delivery and a 5% increase in rental days attributed to rideshare. Driver demand continues to be HyreCar's strongest tailwind as we move into Q2.
Our supply-related operations improved significantly, with median time to verification decreasing by 75% year-over-year, driven by initiatives to make it faster and easier for owners to complete the listing process. We also improved the quality of selection, reducing the percentage of new cars failing verification by 18% over the same period in 2021. We see our performance in March as a pivotal trend reversal for our supply of vehicles on platform for a number of reasons. Number one, we have maintained organic momentum into Q2 with strong utilization rates and high rental days in April and the first half of May. Number two, used car prices seem to be stabilizing, making it slightly easier for our owners to source vehicles. Number three, we've set the HyreCar platform up for success by building capacity into the technology, processes, and systems.
In the coming months, the anticipated warehousing line of credit will be leveraged for our larger partners to operate in additional markets. 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 a record quarter in Q2 as we continue our organic growth trends. We've committed to building an ecosystem to make it even more profitable to do business on our platform. To that end, we are excited to announce several technology-powered features that continue to make HyreCar the most owner and driver-friendly platform for car sharing. Some examples of these initiatives include. The beta launch of citation visibility and management provides an automated solution to one of the biggest pain points for owners, the management of parking citations and camera violations.
Number two, in order to increase trust and transparency on the market, we are implementing new rideshare and delivery specific verification measures that will further enhance owner confidence in applicants. Number three, to increase scalability of our customer support and success teams, we are implementing automated chat that will allow us to absorb the operational impact of increased supply. These initiatives in flight are expected to enhance HyreCar's core business for what should be a record-setting Q2. Finally, as we get closer to HyreCar's most significant initiative for 2022, securing the warehousing line, I look forward to sharing details in an upcoming call. With that, let me bring in Brian Allan to expand on our vehicle initiatives for 2022.
Thank you, Joe. As Joe mentioned, we have many growth-related projects underway. I'd like to start by providing an update on our EV initiatives. 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 for these more efficient vehicles, has made the availability of electric and hybrid options on our platform a priority. The number of fully electric vehicles on the platform increased 62% in the first quarter of 2022 versus fourth quarter of 2021, representing 30% of total electric cars available. Average daily rates for EVs has increased 63% year-over-year, reflecting 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.
EV rentals have continued to gain momentum into quarter two of this year, with the total number of EV rentals in April equaling the total number of EV rentals for all of fourth quarter 2021, and with significantly higher daily rates from $44-$57 over that period. We are particularly pleased with the progress we've made with our Spring Free EV partnership, which has allowed our owners to more easily acquire EVs for the HyreCar platform. As evidence of increasing adoption, the number of orders through this program was 48% higher in April than all orders combined during the first quarter. We anticipate that this significant growth will expand EV vehicle availability across the country and generate more platform revenue while driving higher retention.
As mentioned during last quarter's earnings call, we continue to engage with the progressive buy here, pay here dealers to increase vehicle supply while providing our drivers with an incentive to rent for longer periods. We are partnering with select dealers in our most active markets to launch this initiative and plan to expand as we validate the program. In addition to our strategic initiatives to increase vehicle supply, we have also observed an unexpected trend in owners shifting a greater share of their inventory from other platforms to HyreCar. A competitive advantage unique to HyreCar is that car sharing for rideshare and delivery services have longer rental periods, resulting in lower operational costs and more consistent revenue for owners. HyreCar's rental periods compare favorably to other platforms that typically average one to three days versus weeks and months on our platform.
In fact, the average rental period in quarter one was 2-3 weeks. As Joe mentioned, we recently launched a beta feature for proactively managing parking tickets and citations based on feedback from our owner community about their greatest pain points. We also launched automated communications for owners that has made it easier and faster to approve driver applications for their vehicles. In addition, we have expanded owners' self-service capabilities by piloting a feature that allows owners to directly invoice drivers for miscellaneous charges, thus reducing HyreCar's internal operating costs. We recognize that increasing self-service capabilities across our platform will increase market scalability, customer satisfaction, and ultimately profitability. To support our larger fleet operators, we've rolled out multi-location management as a part of our HyreCar for Business solution following a successful pilot.
This innovative feature provides large operators with greater efficiency and visibility while offering our smaller operators an incentive to grow their fleets and increase market presence. These enhancements will continue to drive retention and loyalty from our medium and large fleet operators whose cars drove over 70% of rental days in the first quarter. Finally, I'd like to provide a market outlook on vehicle supply for the near term. While we have seen used car prices gradually soften from a January peak based on Manheim Used Vehicle Value Index, falling for three consecutive months, prices are still up 60% from April 2019, making it extremely difficult for potential gig workers to purchase a vehicle. Fortunately, our platform provides drivers with the opportunity to participate in rideshare and/or delivery who may be priced out of the market today.
HyreCar's marketplace provides vehicle options and increases the supply of available gig drivers, which we believe benefits our rideshare and delivery partners as the country recovers from the pandemic. With that, I'd now like to turn the call over to Serge De Bock, our Chief Financial Officer, to walk us through some of the key financial highlights from the first quarter. Serge.
Thank you, Joe and Brian. Overall, HyreCar has performed in a turbulent vehicle supply environment, maintaining vehicle inventory levels despite those constraints. We continue to reduce operating expenditures for the third quarter in a row, leading to a cash burn in line with expectations. First, let's address volume. Rental days for the first quarter of 2022 increased 5% year-over-year from 300,000 rental days in Q1 of 2021, and rental volume was relatively flat on a per day basis compared to the prior quarter, and that despite vehicle inventory supply conditions. Our utilization rates for fleets of 20 cars or more continue to fluctuate between 80% and 90%, indicating strong driver demand across a vast majority of markets. Latent excess driver demand for HyreCar vehicles continues to be strong with attractive economics for the driver.
A driver can rent a car on our platform for $59 per day on average, split between HyreCar and the vehicle owner, and make $39 per hour driving 20+ hours on the Uber platform, as highlighted in Uber's most recent earnings call. This continues to validate the driver's opportunity for success. Turning to financials. Year-over-year net revenue in Q1 grew 28% to $9.6 million from $7.4 million in the same quarter of last year, and is relatively flat to the previous quarter. The year-over-year favorable revenue growth delta of 23 points over a 5% increase in rental days continues to stem from pricing and risk controls enhancements, including dynamic pricing and a favorable market trend in daily rental rates reflecting constrained car supply.
Revenue growth organically accelerate in Q2, boosted by increasing rental volume and is currently trending between $10.2 million and $10.7 million, which would deliver HyreCar's highest revenue quarter so far. Daily average net revenue, which represents net revenue divided by rental days, increased from $24 in Q1 of 2021 to $30 in Q1 of 2022. We expect daily average revenue to grow further in 2022 based on current market trends and continued optimization of our dynamic pricing model with additional analytics resources hired this quarter. On the cost side, Q1 gross margin experienced a slight seasonal downturn, hitting 31% from 34% in Q4 of 2021 due to more accidents per rental day in the winter season, as well as continued trends in inflation for car parts and vehicles.
We have more than offset these inflationary trends over the past three quarters by focusing on cost control, better processes, and appropriate risk pricing. We expect to continue being able to pull those levers positively impacting profitability in the future. Meanwhile, we have maintained most of the Q3 and Q4 gains in customer satisfaction, balancing risk control and retention of profitable drivers. Looking ahead, we are still on target to pass 40% gross margins by the end of the year based on ongoing initiatives targeting insurance product, improved driver screening, and incentive for our drivers with low risk profiles and no claims history. Operating expenses totaled $8.3 million in Q1 of 2022, a decrease of $0.2 million over Q4 of last year. Compared to Q1 of 2021, we cumulatively reduced our operating expenses by close to $2 million or approximately 20%.
On a cash basis, we are close to reaching our target of $7 million a quarter earlier than expected, with cash operating expenditure reduced from $7.4 million in Q4 of 2021 to $7.1 million in Q1 of 2022. Q1 savings were achieved through renegotiating agreements and continued focus on reducing non-growth related expenses. Our adjusted EBITDA maintained most gains made in Q4 at a $4.1 million loss, substantially down from a $5.1 million loss in Q3 and a $7.1 million loss in Q2 of 2021. This resulted from our continuous improvement in managing cost of revenue, specifically insurance, while at the same time maintaining a sufficient cash operating expenditure and infrastructure to support growth at scale.
We expect continuing positive adjusted EBITDA trends in Q2 of 2022 and beyond, with economies of scale through top line growth, increased gross margins and maintaining operating expenditure efficiency gains. Our cash position was $11 million at the end of Q1 2022, and we are aiming to strengthen that position in the next quarter in conjunction with our investment in growth as we continue to pursue and support larger financing opportunity for our fleet operators and optimize our cost structure. Looking ahead, we have entered Q2 of 2022 with renewed organic growth and increased revenue forecast between $10.2 million and $10.7 million for the quarter, as well as improved margin from seasonal patterns and continued cost and pricing improvements.
We're aiming to maintain our cash operating expenditure around $7 million with our current estimated cash flow breakeven point still at between 6,500 and 7,000 cars rented on the platform, or a run rate revenue between $65 million-$70 million based on our projected cost structure. Our primary financial objectives in 2022 remains to stimulate car supply on the platform and drive top-line growth to reach cash flow breakeven as rapidly as possible. Back to Joe for final remarks.
Thanks, Serge De Bock. To summarize, HyreCar had a strong start to the year with significant and growing momentum as we enter the second quarter. Financials reflected strong year-over-year growth consistent with increasing demand and supply. While we continued to roll out innovative products and features for both drivers and owners to increase marketplace liquidity while reducing operating expenses and increasing customer satisfaction. As we look forward to the rest of 2022, we are excited to substantially increase supply in order to satisfy demand, especially with the increase in expected driver demand from gig services. Thank you everyone for taking the time to join us for our call. We will look to update our shareholders periodically on the progress we are making. With that, operator, please let us move to Q&A.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your headset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble roll calls. Our first question comes from Mark Argento for Lake Street.
Hey, guys, nice quarter. Just a couple of quick ones for me. One, I just wanted to touch on, you know, kind of the key levers on the gross margin line. I know it was a little bit below what we saw in Q4, still up, you know, nicely from levels of last year. Maybe just remind us what, what are some of the key drivers of the gross margin line?
Absolutely. Hi, Mark. On the gross margin line, obviously the biggest expense is insurance costs. You have insurance premium and then also claims expenditures. What we've seen in Q1 was actually an increase in accidents per rental day due to the winter season, very typical in the insurance industry, and that set us back a bit in the quarter but does not take away that our improvement in the margin. Over two quarters of last year, we managed to improve the gross margin by 10 points. I think we're still on track to aim for a gross margin above 40% exiting this year. This is mostly a seasonal trend.
One other thing that I wanna highlight on the margin side is, while it's a seasonal trend, we've also seen in the industry an increase in the price of car parts and vehicle, and that has impacted as well our cost to operate. So far, we've been able to more than offset that by pricing actions and being able to improve our processes and risk selection of our drivers.
All right. That's helpful. Just turning to the activity on the platform, it looked like overall rental days were up about 5% on a year-over-year basis, down a little bit sequentially from Q4. Can you talk a little bit about number of cars you have on the platform? You know, when could we see actually rental days maybe tick up and not rely so much on ARPU for the revenue?
Yeah. Well, it's interesting. On a macro basis, we're seeing some green shoots in the car, you know, marketplace and used car marketplace, and I think Brian can touch a little bit on it. A t a high level, you're starting to see prices kind of leveling off and/or coming down in some categories. That is enabling our fleet operators, the top 40 essentially that we have in our HyreCar for Business accounts, able to purchase cars, and to have some stability out there in pricing, to kinda know where we're going. I know Brian's been really close to this. He's talking to all 40 of those major suppliers on our platform. Brian, what do you think about that?
Well, I agree with you, of course, Joe. The opportunity, and I've referred to it in the prepared remarks, is we actually have an opportunity to get a larger share of wallet of inventory that's already out there. Even though market supply may be tight in certainly in most markets, we can get cars from other platforms from operators that currently are part of the HyreCar ecosystem. We are already seeing a nice and surprising shift because of our uniqueness that our renters rent for longer periods of time. We're seeing more of that now with the longer rentals and larger supply. Of course, we're starting to share that message with other owners for the opportunity for them to earn more consistent income and have very high utilization of their inventory.
I can add that essentially we had an increase in our guidance and you can see the revenue coming up in Q2 or where we expect it to end. That's a mix of both rental days and also pricing action, but rental days is behind the upswing, and that's a pretty positive factor.
When you factor in the rental day increases, I'd assume more vehicles are on the platform or how do you think about actual vehicles?
Yeah, more vehicles, higher retention of those vehicles as we focus on various objectives to keep, you know, drivers and car risk underwriting those drivers appropriately, et cetera. All of the above, I think, are trending in the right direction right now.
Great. Thanks, guys. I'll hop back in the queue.
Thanks, Mark.
Thank you.
Again, if you have a question, please press star then one. Our next question comes from Mark Argento, Lake Street. Excuse me, Mark, you may go ahead.
Sorry about that, guys. I was on mute. Wasn't expecting to come back so quick. Just one more question on the vehicle availability. The warehousing line you guys referred to it in your prepared remarks. Any update there on where you are in that process? Thanks.
Yeah. We are really close. I mean, we've essentially agreed in principle to the majority of the business attributes of the deal. We're jumping through the last few hurdles to be able to get there. You know, our at best estimate is in weeks at this point.
Great. Thank you.
Excuse me. If you would like to pose a question, please press star one. This concludes our question and answer session. I would like to turn the conference back over to Joe Furnari for any closing remarks.
Well, thank you everyone for joining. We're looking forward to an exciting 2022. We will update you periodically on the progress we're making. Have a great week.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.