San Diego, CA -- (SBWIRE) -- 09/08/2021 -- An investor, who purchased shares of HyreCar Inc. (NASDAQ: HYRE), filed a lawsuit over alleged violations of Federal Securities Laws by HyreCar Inc..

Investors who purchased shares of HyreCar Inc. (NASDAQ: HYRE) have certain options and f should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

On August 10, 2021, HyreCar Inc announced its results for the quarterly period ended June 30, 2021 ("Q2 2021"), including net losses of $9.3 million compared to losses of $3.8 million in the same period the prior year. Furthermore, HyreCar Inc 's adjusted EBITDA loss for Q2 2021 was $7.1 million (four times higher than the $1.7 million adjusted EBITDA loss experienced in the second quarter of 2020) and its gross profit for Q2 2021 was just $0.8 million (less than one third HyreCar's gross profit in the second quarter of 2020), with a gross profit margin of just 24%.

HyreCar Inc also disclosed that it had incurred increased costs of revenue during the quarter primarily as a result of significantly higher insurance claims incidence – including claims before March 31, 2021 "in excess of the reserves."

During HyreCar's earnings call, executives revealed that HyreCar Inc had been forced to revamp its claims processes and procedures and improve its risk price adjustments for policies issued by HyreCar.

And when asked whether HyreCar Inc was actually on track to achieve 45% to 50% gross margins in the near term as previously represented, HyreCar's CFO essentially withdrew this goal, calling it a "shoot for the sky" aim and stating that "shooting for margin upwards of 40%" was more realistic.

Shares of HyreCar Inc. (NASDAQ: HYRE) declined from $19.89 per share on August 10, 2021, to as low as $8.50 epr share on August 20, 2021.

The plaintiff claims that between May 14, 2021 and August 10, 2021, the defendants made false and misleading statements and failed to disclose that HyreCar had materially understated its insurance reserves, that HyreCar had systematically failed to pay valid insurance claims incurred prior to the Class Period, that HyreCar had incurred significant expenses transitioning to its new third-party insurance claims administrator and processing claims incurred from prior periods, that HyreCar had failed to appropriately price risk in its insurance products and was experiencing elevated claims incidence as a result, that HyreCar had been forced to dramatically reform its claims underwriting, policies, and procedures in response to unacceptably high claims severity and customer complaints, and that 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.

Those who purchased shares of HyreCar Inc. (NASDAQ: HYRE) have certain options and should contact the Shareholders Foundation.

Contact:
Shareholders Foundation, Inc.
Michael Daniels
3111 Camino Del Rio North - Suite 423
92108 San Diego
Phone: +1-(858)-779-1554
Fax: +1-(858)-605-5739
mail@shareholdersfoundation.com

About Shareholders Foundation, Inc.
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, , which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigation, and/or settlements are not filed/reached and/or related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.