40 Under 40

Mike Cavanaugh has had a passion for e-commerce for a long time.

Combining that with a lifetime of being surrounded by family in the automotive industry might explain how he ended up in a key role at Driveway, the digital platform of retail giant Lithia Motors Inc.

Cavanaugh started his automotive retail career as a porter and detailer and later enlisted in the Marines. When his military service was complete, Cavanaugh took on various roles throughout the industry and ultimately became COO of the CARite brand of used-vehicle-only stores.

But he took early notice of companies such as Amazon starting with books and then moving into electronics and clothes, as well as the rise of grocery stores offering e-commerce services. 

“At a certain point, consumer expectations just change whether an industry is ready for it or not,” he said. “And I think our industry started to change gradually. And then when COVID happened, it really rapidly changed and more and more consumers started to be ready for a more remote process. But the technology had to catch up with it.”

Enter Lithia, the second-largest retailer on Automotive News’ list of the top 150 dealership groups based in the U.S.

In 2020, Cavanaugh was working for MAX Digital, a software company in Chicago that provided inventory management, merchandising and digital retail solutions to dealerships. The Medford, Ore., retailer was his largest customer. That relationship was key.

Chris Holzshu, Lithia’s COO, reached out to Cavanaugh to see whether he was interested in joining the company.

“He said, ‘Hey, do you love what you do?’ And I said, ‘Why? Do you need some help?’ He said, ‘Yes, lots of it.’ And I said, ‘OK, well let’s talk,’ ” Cavanaugh recalled. “So [in the] middle of the pandemic, I joined Lithia and Driveway before Driveway was a thing or even known. There was no website, there was no personnel.”

Cavanaugh, hired as vice president of operations to take Driveway off the ground, had to form a team to handle helping customers buy, sell and service vehicles from home, build out a customer call center, develop a logistics network to deliver and pickup vehicles, design a proprietary algorithm to value vehicles being sold and oversee inventory acquisitions, among other tasks.

Driveway launched Jan.1, 2021, Cavanaugh said, and in the last 18 months has rapidly expanded from two markets — Portland, Ore., and Pittsburgh — to across the country. Driveway has gone from just a small group of people to around 750 employees and continues to hire at a brisk pace, noted Cavanaugh, who works remotely from metro Detroit.

Driveway completed 1,050 shop transactions in May, Lithia said, and is ahead of its target of 40,000 transactions for the year.

"My ambitions are really just to make this even better than it is today," Cavanaugh said. "And so that's where my sole focus is. I think I've always enjoyed what I've done, but I've never really loved what I do as much as I do right now."

— Jack Walsworth