HyreCar Inc.
Q1 2021 Earnings Call Transcript

Published: 13 May 2021

[Operator:]

Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2021 Earnings Call. At this time, all participants' lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. . Please be advised that today's conference is being recorded. . I would now like hand the conference over to your speaker today, John Evans, Investor Relations and Corporate Development. Thank you, sir. Please go ahead.

[John Evans:]

Thank you, operator, and welcome everyone to our 2021 first quarter earnings conference call. Before we get started, I would 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.

[Joe Furnari:]

Great. Thank you, John, and welcome everybody. I am pleased to say that HyreCar had a record quarter. The combined tailwinds of loosening COVID restrictions, increasing vaccination rates, higher rideshare demand and stable delivery demand pushed our business to the highest quarterly revenue in company history. We are now a stronger, more efficient company and this is reflected in our results. Our net revenue increased 29% to $7.45 million for the quarter, up from $5.8 million in 2020 and rental days increased 31% to approximately 300,000 for the quarter, up from 229,000 in Q1 of 2020. We continue to see robust driver demand. For the quarter, we saw record 5,400 new unique drivers pick up a car on our platform, a 14% year-over-year growth rate. Our expansion to include food, grocery and delivery, plus our focus on increasing customer retention, drove revenue and rental day growth rates and should be additive to the continued recovery and ride share to our delivery drivers and we look to -- as we look to add post-COVID world. Two-thirds of HyreCar drivers are still predominantly delivery oriented. And we see COVID is having accelerated the opportunity and local delivery of a service environment. Not just for food where micro logistics and lower basket sizes now have a flywheel effect moving forward, but everyone is now starting to move into adjacent lanes like alcohol, pharma and package delivery. Sourcing a vetted supply of drivers in local environment is a key factor in our sustained growth. Strong delivery platform demand suggests higher car driver economics will remain attractive, creating a sustainable environment supporting larger and larger driver pools.

[Scott Brogi:]

Thanks, Joe. The first quarter of 2021 was one of the significant changes for HyreCar. We continue to grow car supply to get us over a 1.2 million annualized rental run rate, and completed a $30 million equity financing at favorable valuation terms to top off our cash reserves and allow us to pursue a bigger set of opportunities. Rental days increased to over 30,000 rental days for the first quarter, or a run rate of 1.2 million rental days, up from the 1 million rental days, we recorded in fiscal 2020. For the three month period ending March 31, 2021, rental days increased by 31% to over 300,000 rental days from 229,000 rental days in the prior year's first quarter, and sequentially increased 9% from the fourth quarter, ending December 31. 2020. As weather and supply conditions remains challenging in several key northern geographies. Net revenue grew 29% to $7.4 million for the three months ending March 31, 2021, from $5.8 million for the same period the prior year, and 6% sequentially from $7 million for the three months ending December 31, 2020. After holding steady on pricing for several years, we tested and then enacted some pricing enhancements early in the second quarter to both our driver and insurance fees to better reflect the new competitive environment and align reimbursement rates with new driver risk scoring data. The combination of these two pricing elements should drive significant net revenue and gross margin improvements through 2021 and increase our daily average net revenue from the $24 to $25 a day we've seen historically to the $27 to $28 a day range. Cost the sales increase for the quarter ended March 31st, 2021 to $4.7 million from $3.6 million the prior year, as insurance expenses continue to account for the majority of cost of goods sold primarily due to some seasonal shifts in insurance costs to support higher levels of car supply through the winter quarter. Accordingly, gross profit for the three months ended March 31st, 2021 was $2.7 million increasing 26% from $2.1 million in the year ago period, ended March 31st, 2020. This is an improvement from last year's gross profit margin of 33% for the 12 months ending December 31st, 2020 and flagged sequentially from 37% in the first quarter of 2020. Due to the second quarter pricing changes, we expect our progress toward the gross profit margin near-term goal of 45% to 50%, we have discussed previously to accelerate. Operating expenses increased to $9.9 million for the three months ended March 31st, 2021 from $6.3 million in the same period the prior year or by 59% year-over-year. This is primarily due to increased operations sales, new technology expenses to drive higher business levels and invest in operations and technology in particular to further accelerate the platform into 2021.

[Joe Furnari:]

Thanks, Scott. So to summarize, HyreCar is carrying our growth trajectory into the second quarter and enjoying the tailwinds of the pending full reopening of the economy. Our partners are stepping up to deliver the cars they agreed to deliver despite the tight car sales markets. We're seeing pricing opportunities with the current competitive car availability environment, which should add incremental margin gains and help us move towards EBIT on neutral in the second half of this year. And we're leveraging opportunities for additional revenue streams. The bottom line, the future is bright as we continue to execute our growth strategy throughout the remainder of the year. So with that operator, let us move to Q&A.

[Operator:]

Our first question comes from the line of Mark Argento from Lake Street. Your line is now open.

[Mark Argento:]

Hey guys, congrats on a strong quarter. A couple quick ones. First on pricing, could you talk about the dynamic pricing project? And then how aggressive you are going to be in terms of rolling that out?

[Joe Furnari:]

Yes, absolutely. Thanks Mark for calling in and giving the question here. With the dynamic pricing that we rolled out, we're doing a couple of things. We're looking at the risk underwriting data that we've had over the last -- that we've accumulated over the last five years, applying that to current leads and geographies, and then coming out with a pricing matrix that we think accurately reflects the risk of that driver segment. So, we see some real upside there. That's number one.

[Scott Brogi:]

Yes, I completely agree with that. And then just wanted to add that we actually went ahead and went live with that, in April after doing a lot of analysis on the sensitivities out there. So, that's already being reflected now, as we've moved into May, as new renewals come online. So, moving forward through the balance of 2021, you're going to see that that that pricing really start to have a pretty dramatic impact on our contribution per day.

[Mark Argento:]

And is that something that you've implemented across the platform or are you guys doing market-by-market?

[Scott Brogi:]

We tested in a few markets, honestly, Mark, first to gauge the impact and then recently went forward with changes to both the driver fee as well as some of the other elements in the pricing. So, that has gone effective nationwide.

[Joe Furnari:]

Yes, and to Scott's point within the unit economics of fees, like there are multiple levers that we're pulling out. So, we're playing with them, depending on the different geos.

[Mark Argento:]

Great, that's helpful. And then just last one for me. In terms of the uptake and the onboarding of vehicles in AmeriDrive partnership, maybe talk about kind of where you are in terms of that first tranche of cars and how you see that tables throughout the rest of the year? Thanks.

[Joe Furnari:]

Yes, I see that. They're still on the run rate that we had spoken about in February. I think we got a lot of the bugs figured out and kind of as mentioned in the script, we're looking at launching the next geography start as you want. So really, really excited about that, because I think that's a template that we've established, that we can really start to replicate in probably our top 30 geos. So, it's going to be exciting to see it really roll out and AmeriDrive has ended up being a really solid partner. It’s the partner that we thought they were going to be, that we knew they were going to be along with, that of all the affiliate players that are around there, including Cogein and the National retailer chains. So, yeah, it's really exciting. So, we're moving on to Phase 2, which is launching a new deal.

[Mark Argento:]

Great, thanks, guys.

[Joe Furnari:]

Thanks Mark.

[Scott Brogi:]

Thanks Mark.

[Operator:]

Our next question comes from the line of Mike Grondahl from Northland Securities. Your line is now open.

[Mike Grondahl:]

Hey, guys, congratulations. A couple questions for me. First off, I think you said in March, you averaged 3,500 average daily rentals. And now, May, you're kind of projecting 4,500. So we kind of see that lift. Joe, can you kind of describe what you meant by the 16,000 cars at the end of 2022? Is that a goal? Is that kind of based on the fleet managers you're talking to you feel you can get there? If you could provide a little bit more detail there?

[Joe Furnari:]

Sure, yeah. So, what I see with kind of reduce competition in the market is that, there's about 60,000 cars nationwide that have left the market in this firm. And as you see, the title of the demand coming back from the ridership side, there's an opportunity right now with the people we're talking to, to add those 16,000 cars in. So, I don't want to imply that guidance. But I do want to say that like that's -- those are the conversations that we're having with all of the partners that are coming on, and that we're talking to. And so, we're looking to support that by building capacity into our customer service program, the call centre, all of the technology, the technology has that we've added. And so, that's kind of what -- that's what I'm talking about when we're saying 16,000 opportunity.

[Mike Grondahl:]

Got it. Got it. Yes, because that it's basically four times where you're sitting right now. So there's a lot of growth potential.

[Joe Furnari:]

Yes. And that's -- with what we have in front of us right now with our firm. That's what we're going to target.

[Mike Grondahl:]

That's in front of you right now. Okay. Yes. And then, just on the pricing, the $27, $28 to hire car a day. When are who’s there? Are you saying you're there now, or you'll be there July 1? How do we roll that into our models?

[Joe Furnari:]

Yeah, I mean, it gets introduced into a new rental starting in April, right, beginning of Q2. So to your point -- I mean, I think, as you move into the back half of the second quarter, which will really start next week, you'll start to see more and more of that weighted effect. So, I think it might actually be a little bit sooner than that. So you're actually going to see a reasonably significant impact to Q2. And look, there's a few renters out there that might rent for longer than three months. But yes, it should basically be 100% in for the full second -- the second half of 2021. Does that help, Mike?

[Mike Grondahl:]

Yes, it does. It sounds like it's coming really quick.

[Joe Furnari:]

Yes. Yes.

[Mike Grondahl:]

You guys have a bullet point, cost per booking decreased 39%. Is there a way we can translate that into gross margin, or -- 39% is a big decrease in, I think, getting a driver through the marketing phase and boarded? How do we think of that as sort of a gross margin benefit?

[Joe Furnari:]

It's more of an OpEx benefit, right? Not necessarily a GP benefit. I think from my perspective, and maybe Scott can chime in too. Like, my perspective is what that's telling you and what we wanted to convey is that, there are more drivers coming onto our platform organically. And I think we're doing a better job at targeting leads and so, you're starting to see more and more people coming on. There's a couple of tailwinds there, right? You don't have -- you have less competition. You have a higher -- an elevated presence with our TNC partners. You have less people renting cars for delivery. So there's a lot of things kind of driving those extra leads coming through. And then, on the on the flip side, we're doing a really good job of converting them. And so, you're seeing that with the increase in leads, you're also seeing a increase in conversion rates, which ultimately drives revenue through conversion of new unique drivers to the platform. So that's how I think of that.

[Mike Grondahl:]

Got it. And then maybe lastly, up until recently, you guys were stuck at 3,000 cars, as you kind of went from the peer to peer to the commercial model. And now in May, it sounds like 4,500 cars. What level do you think you need to be between 4,500 cars and 16,000 cars to get Uber and Lyft’s attention? At what point do they say, oh, my gosh, HyreCar's got all these cars, let's talk?

[Joe Furnari:]

That's a really good question. I think that we have everybody's attention now. With the AmeriDrive deal. And a TrueCar deal, which is alternative revenue, it just -- it creates a branding -- a quality of brand around HyreCar that enables other, not only TNCs but also manufacturers, OEMs and larger dealer groups to look at and say, you're a public company, $0.25 billion, and you have all the -- you're establishing these partnerships. So we have some real brand equity that we've established through these partnerships. And that I think is getting everybody's attention at this point.

[Scott Brogi:]

Yes. I definitely agree with that. I think, one of the themes that I got out of Uber and Lyft’s quarterly earnings call last week is that, both have now divested of their autonomous driving divisions. And I think they're now more open to thinking about new ways that we want to partner to get car supply, because they don't have this solution coming down the road internally anymore, right. So I think on the EV side in particular, they seem to be moving a lot more quickly. So that's very exciting for us.

[Mike Grondahl:]

Great, guys. I'll jump back in queue. Thanks.

[Operator:]

Our next question comes from the line of Tom White from D.A. Davidson. Your line is now open.

[Unidentified Analyst:]

Hi, everyone. Congrats on a great quarter. This is Travis Robertson on for Tom. If I may, I'll have one question and one follow up. So first, recently, we talked about the Uber and Lyft earnings that happened last week. And they talked about investing in growing their drivers supply. Can you talk a bit about what that means for your business? And how you guys might be able to ensure that, it's really your vehicle supply that really benefit from this, instead of like any competitors? And then, I have a follow-up after that.

[Scott Brogi:]

Good question. So if you look back on how they have both, Uber and Lyft, how they have driven driver incentives, they've done it, kind of like a two-pronged approach. This was really back in 2017, 2018, 2019, pre-IPO, where they were driving through affiliate. So a driver refers another driver or their affiliate partners or signing drivers up. And they were giving money to the affiliate that was signing up. And then, the second piece was they were getting driver bonuses for drivers hitting certain right incentives. And it sounds like, in listening to their calls last week that they were both going to be reinstituting those programs. And that is really, really good for us. We were I think probably the number one affiliate of Lyft, when they were running those programs. I anticipate being a very strong affiliate partner for Uber as well. And so that is a all under the umbrella for us, under the alternative revenue umbrella that just drives the gross profit margins up and why Scott and I are pretty comfortable being about 45gp to 50% gp margin. So that's how we're planning on doing that.

[Unidentified Analyst:]

Awesome. And then, for my follow-up, I was just wondering, how we should think about the likelihood of ramping up new car inventories later this year. And maybe like, just share a few of your thoughts on how you've that pay channel to grow, through the remainder of this year?

[Scott Brogi:]

Yeah, yeah, so from a from a brand perspective, AmeriDrive is really the game changing announcement for us. And that they are going to ramp. They have the financing available to ramp. And they know how to buy cars, at scale. So that's going to be our incremental growth through the back half of the year. Along with, three or four other partners that we're talking to, that also want to scale very quickly. And those partners will be future announcements, I believe, but they're also talking about large, large lump sums of the supply onto the marketplace. And so that's part of why I'm comfortable talking about 16,000 cars, because that's the narrative he added all together. That's where we're getting those cars from the fleet suppliers that we currently have. So it doesn't include the supply that is going to come in the future with deals that we don't know about yet. So that's how we're looking to grow. I think we're going to support that by increasing our account managers, account executives in market to provide White-glove service, recently rolled out a new TPA to really aid in speeding up the claims process for our vehicle owners, so they can get those cars back on the road quickly. So that's an exciting piece. And, and also ramping up some of the organic channels to see really the car supply growth through those channels as well. So that that three pronged approach is how we're attacking it, throughout the rest of this year and ended 2022.

[Unidentified Analyst:]

Great, thanks for taking my question.

[Scott Brogi:]

Yeah.

[Operator:]

Our next question comes from the Jack Vander Aarde from Maxim Group. Your line is now open.

[Q – Albert Kim:]

All right, this is Albert talking for Jack. First of all, congrats on a great quarter and thanks for taking my question. I just want to start with the assumption on the weekly average rental fee, I believe historically it was about $35, what’s like the new value changes to the pricing. Do you see any changes to that happening, or any trends going forward?

[Scott Brogi:]

Yeah, I think you got to -- you have to remember that the daily rental rate on our platform is actually set by the car owner. So the $35 or $36, that that you're quoting, we get a we get a percentage of that through both an owner fee and a driver fee. And then we have an insurance fee. So basically, when you net those three revenue elements out historically HyreCar is at a $24 to $25 day net revenue take, out of a total gross transaction of let's call it $55. Well, with the pricing changes that we just rolled out in April 2021, we see that increasing from that $24 to $25 range to more like a $27 or $28. net rent. So it's a pretty significant increase on a net revenue basis. And that pricing increase along with the higher volumes that Joe's been talking about will give us you know, kind of a double impact on the net revenue line in Q2 and through the balance of 2021. Does that make sense?

[Q – Albert Kim:]

Yeah, that was very helpful. Thank you. And I guess, another question for me would be on the vehicle utilization level. So there's like a huge growth in the number of cars. And I was wondering if that has impacted, I believe like the typically 8% of the utilization rate before?

[Joe Furnari:]

Yeah, good question. So, and it's part of the strategy of why we're moving towards commercial which is in those commercial fleets, you tend to see higher utilization. So you know, in our commercial fleets, I think we're seeing us high 80%, low 90% utilizations in those fleets. And then in the peer to peer it's a little bit lower. So it typically averages out or nets out to about 85%, 86% utilization. That's pretty -- that's pretty consistent. That's where we're seeing kind of normalize. And I think as we get more the shift in the next move towards more fleet, you're going to start to see higher utilization rates tick up as we as we move forward into the second half. But not really meaningful. It's really a -- it's an absolute value. It's not necessarily like a way to, it doesn't really translate into revenue. For others, there isn't a direct correlation.

[Q – Albert Kim:]

Okay. Thank you. That was very helpful. And the follow up questions for me. Thank you and again, congrats on the quarter.

[Joe Furnari:]

Thank you.

[Operator:]

Our next question comes from the line of Mike Grondahl from Northland Securities. Your line is now open.

[Mike Grondahl:]

Hey guys, just to follow up with the TrueCar relationship, I think you guys are getting a referral fee? Do you get that only if your customer buys a car, or do you get that for just kind of sending that lead over? I mean, you guys had 5,400 unique new drivers in the March quarter who were looking for cars. So I'm just kind of curious how that works with two car?

[Joe Furnari:]

Right. So there's a Phase 1, Phase 2. Phase 1 is we refer drivers and when they -- when that driver purchase the vehicle, that's when we get the referral fee. And then Phase 2 with TrueCar is hopefully getting access to the 16,000 dealerships, that they have both franchise and independent and do some cross marketing, joint marketing with them. So that has a dual effect of creating more supply as well as monetizing the drivers that we were losing anyway, right. They were going out and buying a car. And so now we're monetizing that on the back end. I think I'll have -- that was that was relatively new. Last quarter, we started out with like March -- February, March. So we really started ramping up February and March. So I think I'll have more numbers around that initiative and some of the other affiliate and alternative revenue initiatives in Q2, and so we'll talk about those we have break them out and how I see I'm going to grow in through the second half of the year.

[Mike Grondahl:]

In hey, Joe, I'm sorry, but what was Stage 2? You kind of broke up, you said something about access 16,000. And then I lost you for like 10 seconds?

[Joe Furnari:]

Yeah. So we have joint agreement, joint marketing agreement, we gain access, HyreCar gains access to the 16,000 dealerships, that TrueCar currently services and sources leads to. So that's the exciting piece of Phase 2.

[Mike Grondahl:]

Got it.

[Joe Furnari:]

Because that really drives supply for us organically. And that's why I'm really excited about organic channels kind of started to ramp up here, along with the larger fleet, specialty fleet operators that we're dealing with as well.

[Mike Grondahl:]

Sure. And then just -- hey, my last question. You mentioned that Earn-to-Own program and -- with ACC consumer finance in the retention was like five times, roughly how many drivers are in that program? Is it just too early to mention, is that next quarter too, but five times the average length of a rental. I mean, that's incredible? Is your 10 drivers in that or 100 or kind of where's that at? Where do you think it can go?

[Joe Furnari:]

So I see this really starting to grow. We don't have very many dealerships signed up. We have a small percentage of our driver population signed up. But the -- a big chunk of our driver population about 30%, 40% or so are longer term drivers, where this type of program would benefit them. So we're running it right now. We have these drivers on. So how I'm doing that math, I'm looking at right now in that program as drivers are averaging about 90 days, mean average is about 18 days for driver. So that's where I'm getting the five times. And we see that growing even further because the program is 120 days, once you've been in the car for 120 days, then that down payment applies to the vehicle purchase and you walk away with a car. So I will -- yeah, I think next quarter, we're going to have enough data out there to say yes, this is viable, and we're going to move -- we're going to really ramp it up and then I can give you all the details then.

[Mike Grondahl:]

Sounds good. Thank you.

[Joe Furnari:]

Yeah.

[Operator:]

Our next question comes from the line of Keith Hambrick from . Your line is now open.

[Unidentified Analyst:]

Hi. It's Keith Hambrick. Thank you very much for taking the question. So when you guys are talking about these price increases, historically you you've always lead investors to think about every 1,000 cars is roughly $9 million annualized. What's the new rate, should we start thinking like 10,000? Every 1,000 cars is $10 million annually. How should we think about that?

[Scott Brogi:]

Yeah, hey, KC, it's Scott. I think that's probably a good basic way to think about it, we’re -- the parts that we're -- that has some additional upside to it, it's the risk adjustment piece, right. There's a driver fee component, and a risk or insurance component, and it's dependent on the mix of drivers within some different risk pools. But I think it's pretty safe to assume that it's going to be at least a 10% increase to that per day contribution. So, yeah, going from $9 million to $10 million per 1,000 cars, that's a good basic way to think about it. And hopefully, we can do a little bit better than that.

[Unidentified Analyst:]

So then -- so if we look on one side of the whole ecosystem, if you're getting better drivers for using the cars longer, being provided by Uber or Lyft. And you're getting these large fleet providers who are bringing these cars on knowing that you have better drivers who are incentivized is that like how we think and the wheel just spins faster and gets bigger at the same time?

[Scott Brogi:]

Yeah, I mean, it's definitely being a little bit more selective, right? Because certainly, there's a car supply issue, I think we've all seen the stories. I think Brian passed one around about people driving U-Hauls around Hawaii on vacation or something, right? So there's a shortage of vehicles, as we all think about our summer vacation plans out there. And so part of us reflecting that, and then part of it's just better data on the risk side. So that is part of our driver vetting process, which is a lot of the value that car suppliers or the car owners see in higher car that we're providing them, better information and better drivers. So yeah, I think it is those things coming together, as you said.

[Unidentified Analyst:]

Okay, and then last question. So if I'm thinking about this thing, the model right now, I mean, you renting around $30 million, over a little bit more on an annualized run rate, depending on how many cars you're using. And then if we take a step forward at the end of 2022, if you have 16,000 cars at $10 million of top, that's annualizing, around $160 million annualized obviously, you're going to have some massive operating leverage as you break even through 5,000 cars. So you're going to have some scale there and some profitability. I mean, so and when I look at the market cap, you're trading at $180 million right now. So you're trading for a company that's going to grow revenues 400% with and breaking through profitability, you're trading at one-time revenue. Is that -- am I doing the math, right?

[Scott Brogi:]

Yeah, I think so. Yeah.

[Joe Furnari:]

That sounds about right.

[Unidentified Analyst:]

All right. Sounds cheek. Thanks very much.

[Scott Brogi:]

Thanks KC

[Joe Furnari:]

Thanks KC

[Unidentified Analyst:]

Great work. Thank you.

[Operator:]

Our next question comes from the line of Josh Goldberg with G2. Your line now open.

[Josh Goldberg:]

Hey, Joe and Scott. It’s Josh Goldberg. How are you doing?

[Joe Furnari:]

Good Josh. How about you?

[Scott Brogi:]

Hi Josh.

[Josh Goldberg:]

Good. I think the wheels are starting to roll here. Question about the new drivers that you added, 14%. Your balance sheet is stronger now. It would seem to me that you can lean in on both the traffic acquisition side to grow new drivers, as well as maybe using your balance sheet to somehow increase your car supply as well. So can you talk a little about how much can you pick up on both sides going forward?

[Joe Furnari:]

Yeah, it’s good question. So from a marketing perspective, even as our acquisition costs have gone down, there's budget to really accelerate the lead side of things. And we're kind of seeing that I think in the – in the month of April, we did about 35,000 leads. I think May we're chiming to over 40,000, so you're seeing us leveraging that and that'll be more apparent in Q2. And then on the supply side, from where we are right now we're seeing some more organic traffic and so I think, the guys on the marketing team are leaning into kind of spending into those that interest on the organic side. Organic side, the way I kind of define organic is individuals and then also kind of mini fleet guys, people with four to 24 cars, so you're seeing more interest from those guys as well. So leaning in and targeting them on top of commercial initiatives are kind of how we're thinking about it.

[Josh Goldberg:]

Okay, and on the supply side, in terms of getting more cars?

[Joe Furnari:]

Yeah. And that….

[Josh Goldberg:]

balance sheet at all…

[Joe Furnari:]

Yeah, absolutely. So like, what – the way they're – the way we're leveraging that is spending up a little bit on organic traffic. And then, you know, relying on our account managers and the call centre to convert those, that organic and a supply side traffic into vehicles onto the platform. And so you're going to see – you're going to see more and more cars coming onto that growth level. And then you're also going to see more and more drivers coming on, because you’re spending, you are leading into the marketing opportunity and spending into it, but also because, you know, there's less competition. So that's kind of how I'm looking at it.

[Josh Goldberg:]

How are you able to kind of gauge the reactivation of old drivers now? I mean, I would think that people that have used your site and been happy at this point, with such a hard supply of cars, you might see that database of old customers come back online. Have you seen any of that happen yet?

[Joe Furnari:]

A couple of aspects to that. So we are certainly mining the 1 million plus drivers that we have in the database for the affiliate revenue, the TrueCar partnerships and stuff like that. So that's one and to monetizing, monetizing those leads. And then there's always an aspect of retargeting to drivers that have gotten into a car and need to come back in. And then also the – we call them reconversion rates. So looking at reconversion rates through time, and looking back two weeks, looking back 30 days, looking back 60, 90. And that's you have different market…

[Josh Goldberg:]

Has there any new data now? Has there been some new data on that because of what's going on in the economy. Like, are you seeing acceleration of more reactivation sooner, like somebody will come back more in the last three or four months and what historically has happened?

[Joe Furnari:]

You know, it's kind of – it's staying flat, you know, we're doing a lot of things with has reengineering of the operational side of things. So we're moving some – we’re moving some rolls over to the call centre, we're moving, you know, historically, what we had seen outside of driver closers over to account managers that are working on just converting supply side, so converting individuals, and dealerships, et cetera. And so we're really relying on more of the marketing piece – on the marketing side to retarget drivers and also the call centre people. So it's flat right now. I don't -- I'm not really sure where to see, where we're going to see that pan out for the rest of the year. But it's not - -I'm not seeing a big kick-up in reconversions for people who have driven basically like 90 days or less for us and are not getting car now.

[Josh Goldberg:]

Okay.

[Scott Brogi:]

But I think that, if that's something that we can talk about that potentially giving those numbers out, maybe if we see that they're valuable for investors. So let me dig into them and go from there.

[Josh Goldberg:]

Okay. And the idea that there's, obviously more days, as you progress week-after-week, it sounds like you're going to get to a pretty healthy average daily rate here in the second quarter. The excitement, I think, people have today is the announcement on the new pricing. And Scott, I guess, by guiding to 27, 28 people will probably take your numbers up 8 to 10 sequentially from there. And then the obviously the more cars you get and they'll probably come up with a – what fairly 10 million or so number in second quarter. But tell us how we can get higher than that, third and fourth quarter? What's going to be the next leg? Is that really going to come from just more cars on a platform to AmeriDrive, or is there other things you can do to drive revenue growth on top of where you're going to exit June? Thanks so much.

[Scott Brogi:]

Yes, absolutely, Josh. Thanks again for the question. I think, certainly the volume side of the equation is there and the entire team is focused on that. I think, this is kind of a first step on the pricing side of things. I think we're getting a lot more data now out of our mobile sources so that we're getting a lot better information. And we're always trying to do a better job on the driver vetting side of things to get those into the vehicles of our key partners. So I still think there's some more room to go there. These were, what we rolled out in April were elements that we felt really, really comfortable and again had done some pretty significant cyber-side testing. And then, I know, Joe touched on it a bit in his call some of the other ancillary revenue sources, the TrueCar relationship. There's a few other things that I don't think we've formally announced yet that..

[Josh Goldberg:]

But you are not expecting that to be more than 3% to 5% of revenue at best -- at this point, right?

[Scott Brogi:]

No. I don't think we see either of those things as huge contributors. I think the TrueCar relationship has the potential to go there. So the lion's share of that growth will continue to be from volume and pricing adjustments up.

[Josh Goldberg:]

All right. Okay, great. Thanks, guys

[Scott Brogi:]

Already. Thanks, Josh.

[Operator:]

At this time, I would now like to hand the conference back over to Joe Furnari for his closing remarks.

[Joe Furnari:]

Great. Thank you, everyone. Appreciate all the questions and look forward to catching up next quarter. Appreciate everybody sticking with us right? In the words of, I think, Josh, the wheels are starting to turn. Really appreciate everybody. Thanks. That's it operator.

[Operator:]

Ladies and gentlemen, you may now disconnect.