In a ‘we’ve got the band back together style’ many of the management team behind the new MSO Drive have regrouped from their days at AMA. Sam Street caught up with Steve Bubulj, Trish Evans and Briony Turner to find out more.
The rise of the MSOs has been inevitable as economies of scale become more important in a margin slim environment. It’s happened all over the world and while Australia had an unusual situation with AMA Group totally dominating the market at one time, market forces will always encourage competition. Enter the Drive group.
The group operations began in ACT back in September 2022 and already has 15 locations including a caravan repair business on the Gold Coast and more than 300 staff. It also owns a claims management company.
Steve Bubulj is the Founder and CEO of Drive and was formerly CEO of AMA Panel Division. And, when we say the band got back together, it’s quite a band. Dave Marino who was in charge of Capital S.M.A.R.T is now in charge of Drive’s Group Strategy; Dave Calder is Chief Operating Officer; Shane Hunter as Director of IT is on board; there’s Trish Evans as director of HR, Vince Sercia as CFO and Dave Fantom as Chief Commercial Officer.
There has been much industry speculation about Gemini founder and former CEO Andy Hopkins being involved in Drive but Bubulj states that this is simply not factual.
“The genesis of Drive Group starting was the exec team we’ve assembled,” Bubulj says. “We have a fair bit of background in this industry in various forms and at that time we were thinking about whether to create a new entrant into the market. We just looked at the landscape in terms of competition, need from customers and where we saw the industry heading. We thought that as a collective, with our combined experience, that we have value to add to the industry and could drive some further innovation and competition.
“So, we got together and decided that we would effectively have a crack at starting a new business, a new entrant to the market. There clearly have been a few entrants in the last couple of years and I think it’s great for the industry. It’s great for sparking innovation and competition - no one wants stagnation in any industry.
“We spoke to a couple of investment groups over a period of time to assist in getting us off the ground. The business is private and it’s funded by a significant investment group of excellent calibre which we’re really proud of. So those were the ingredients that allowed Drive to get off the ground as a start up,” he said.
To go from one site to 15 in 18 months of operations is no mean feat. “It’s been a lot of work from the core team that we’ve assembled. Seventy five percent of those sites are greenfield, everyone that’s set up a new site knows the effort required to get a greenfield site operational.”
Business vision
The vision for the business is to ‘deliver solutions to customers in innovative ways’. “Our belief is that is that we’re only as good as the collective team and that’s what our investors saw in our business plan when we first put it together. It’s not one person, it’s the strength of the team and we all come from different and diverse backgrounds.
“We certainly see further growth of the MSOs in the next few years in the Australian marketplace and we’ll have our part to play there. We suspect there’ll be a bit of consolidation over the next couple of years as it becomes more challenging for independent operators with technologies such as EV and ADAS become more prevalent and with the skills shortages and cost pressures.
“Those pressures won’t abate, and they are of course the same for us. However, our approach is to build in some strength in the collective power of the team and some consolidation to get the back of house to support our operations so it’s really efficient and running well,” Bubulj says.
“We believe that by supporting the operations managers really effectively we can take away a lot of the traditional headaches and let them get on with what they do best - providing a quality repair, doing it in a timely fashion and delivering that repair at a competitive price. If we’re not competitive we won’t grow and there won’t be customers, so that’s super important.”
Setting up shop
Expanding the network so quickly has included a lot of teething challenges and growing pains. “ We’re on a maturity curve, going from effectively a start-up with nothing to 15 sites and just over 300 people in just 18 months. That’s only going to continue to grow from this point onwards. There’s been a lot to get ready and setting up the foundations around how we’re approaching our people, our training, our finance, HR systems, and importantly safety, as well as ensuring we’re up to date with the latest legislation has been a huge task. Now that’s in place we have a few innovative ideas around how we can drive some efficiency, both from a technical perspective but also administratively and how we’re going to attract staff in the future.”
Staff culture, an apprentice program and training fall under the HR banner and Trish Evans and her 2IC Briony Turner have been very busy indeed. The network already has over 30 apprentices and a well fleshed out employee proposition with plenty of benefits and flexible working arrangements. There’s also a laser focus on developing a safe work culture and a culture of knowledge sharing and transparency. They have been working on building the brand to ‘solidify us as a trusted employer in the marketplace’. Four of the sites are on the road to I-CAR Gold and there’s been widespread education around working on EVs. “We’re also developing a program for emerging leaders, so there’s a succession plan for all us sitting at the exec table and for key management roles,” says Evans.
There are plenty of plans for growth both domestically and overseas. Drive aims to have 20 locations by the end of the year. The current sites are located in Queensland, ACT, Victoria and Western Australia. Sydney is on the cards but is universally recognised as the most challenging market to enter, not least because of the scarcity of suitable real estate. Bubulj points out that as well as the core Drive team responsible for setting up new sites, partners such as Sikkens and M&N Spraybooths have been pivotal in helping them grow.
The group’s customer base is not dominated by any one insurer. “We’re servicing a variety of customers and we think that’s prudent given the market the way it is today. That might change in time. We have a mix of customers - obviously the big ones, IAG and Suncorp but also state-based insurers with whom we’ve nurtured relationships over the last 18 months.”
The sites range in size from 1500 to 5000m2. “They’re tailored to the customer and the type of work that’s going through those sites and the technical capability required to sustain that,” Bubulj says.
Decisions on the geography of where the new sites emerge are a mixture of customer need and opportunity. “Ultimately the customers will determine what that need is and where that site should be. There have been the odd opportunities which have just popped up. So we run that by our customers and if it suits the need then we go for those as well.”
“It’s been an exciting time,” Bubulj sums up. “It’s come with its challenges but in a business growing as fast as we are that’s going to happen. But we’re cognisant of that and the key is, it takes a team to achieve a dream and that’s what we’re about.
“We’re most proud of the team that we’ve assembled and we’re starting to make a difference in the industry, which is what we intended to do.”