According to the Complaint, HyreCar Inc. operates a web-based marketplace that allows car and fleet owners to rent their cars to Uber, Lyft and other gig economy service drivers. HyreCar operates a platform that connects gig drivers with automobiles, while also providing insurance and tactical support.
The Complaint alleges that, throughout the Class Period, Defendants made false and misleading statements and failed to disclose that: (i) HyreCar had materially understated its insurance reserves; (ii) HyreCar had systematically failed to pay valid insurance claims incurred prior to the Class Period; (iii) HyreCar had incurred significant expenses transitioning to its new third-party insurance claims administrator and processing claims incurred from prior periods; (iv) HyreCar had failed to appropriately price risk in its insurance products and was experiencing elevated claims incidence as a result; (v) HyreCar had been forced to dramatically reform its claims underwriting, policies, and procedures in response to unacceptably high claims severity and customer complaints; and (vi) as a result, HyreCar’s operations and prospects were misrepresented because HyreCar was not on track to meet the financial estimates provided to investors during the Class Period, and such estimates lacked a reasonable basis in fact, including HyreCar’s purported gross margin, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), and net loss trajectories.
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