Just Eat Takeaway’s pending sale of Grubhub has been complicated, CEO Jitse Groen told investors Wednesday. Groen said conversations are ongoing, but M&A activity in the U.S. has been slow.

Existing fee caps, especially in New York City, have made conversations regarding the sale difficult, especially since they make “it tough to put a decent multiple on Grubhub,” he said. Groen did not provide further details on which types of parties JET has already held discussions with.

Just Eat Takeaway has been looking to sell Grubhub, or to enter into a strategic partnership, since April 2022. JET originally bought the company for $7 billion in 2020. By 2021, JET was under pressure from activist investor Cat Rock Capital to sell the subsidiary, which Cat Rock Capital said was reducing JET’s overall value. In August 2022, JET reported a goodwill impairment of about 3 billion euros ($3.04 billion) related to its Grubhub acquisition that was caused by a reduction in sector value rather than Grubhub’s operational performance.

Grubhub’s cash flows have improved and are on a path to breaking even, minus the impact of New York City fee cap amendments. With pending lawsuits against the fee caps in New York City, Groen said he expects the caps to eventually end, but doesn’t know when.

“If the fee caps roll off great, then the profitability profile [at] Grubhub starts to look like the rest of the business,” Groen said. “But it’s difficult to control things that we don’t control.” 

During the first half of the year, Grubhub’s cash flow was negative 56 million euros ($62 million), compared to 136 million euros ($150 million) reported in the first half of last year. 

Groen added that the company expects a $30 million run-rate savings from 2024 onwards following Grubhub’s recent restructure. That reorganization, which occurred in the second quarter, resulted in a staff reduction of 400 employees. JET also hired a new CEO at Grubhub in March. 

Grubhub has achieved a few wins, however. Its Amazon/Grubhub+ partnership, which began in 2022, was extended for another year and provides the company with a competitive advantage and “represents significant opportunity for future growth,” Groen said. That partnership provides a free year of its subscription membership to Amazon Prime members. This month, Grubhub also updated its subscription program with more perks, including lower service fees and a 5% credit on pickup orders.  

Grubhub has made a few upgrades to its products, as well. In February, it added three features to its Direct platform, which offers commission-free branded online ordering for independents. Those features included an integration with Google Business profiles and a $0 delivery fee per order (previously $1.99). In May, Grubhub enhanced is Grubhub for Restaurants portal with customer insights, self-serve refund request and self-serve photo shoot access.