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Restaurants see ‘glimmer of hope’ in state’s economic stimulus bill

New legislation includes $20 million in grants and caps third-party delivery fees

Amanda Fraedas, a food delivery gig worker, carried an order out of El Jefe's Taqueria in Cambridge on April 16. The restaurant is one of many that asked local officials to put restrictions on the fees food delivery services like Uber Eats charge as more restaurants shifted to those services during the COVID-19 pandemic.
Amanda Fraedas, a food delivery gig worker, carried an order out of El Jefe's Taqueria in Cambridge on April 16. The restaurant is one of many that asked local officials to put restrictions on the fees food delivery services like Uber Eats charge as more restaurants shifted to those services during the COVID-19 pandemic.Blake Nissen for The Boston Globe

After a relentless 2020, area restaurant owners are feeling a bit more hopeful with Wednesday’s passage of an economic development bill on Beacon Hill that includes a number of measures that could offer significant support to their industry.

The bill covers a wide swath of new initiatives, many of which are designed to help Massachusetts businesses and individuals survive the pandemic, and has several sections dedicated specifically to supporting restaurants, which have been devastated by pandemic-imposed shutdowns and capacity restrictions. It includes the creation of a $20 million grant program to provide financial and capital assistance to restaurants and a measure that would cap the fees charged by third-party delivery services like Uber Eats and GrubHub at 15 percent of the cost of the meal.

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“It was finally some good news that fell into restaurants’ laps,” said Bob Luz, the head of the Massachusetts Restaurant Association.

The bill comes on the heels of a long-awaited federal stimulus package that will create more Paycheck Protection Program funding, and a massive $668 million small business relief program announced by Governor Charlie Baker in late December, which has now begun taking applications. The start of a new legislative session is now underway, and Baker has 10 days to act on the bill.

Restaurant advocates have been pushing lawmakers for months to pass measures to ensure their industry would have the financial wherewithal to survive the tough winter months ahead. Now, after the marathon late-night legislative session, several local restaurant owners said they woke up to a bit of a brighter morning.

“Traditionally, these are the worst weeks of the entire year, but we’re plowing through and are beyond pleased,” said Tony Maws, the owner of Craigie on Main and one of the founders of Mass Restaurants United, an advocacy group that sprang up in the early days of the pandemic to lobby for independent restaurant owners on the state and federal level.

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“It’s a sense that now we are in this together, and that’s a big difference for both our psyche and our bank accounts,” he said.

Restaurant owners also were buoyed by the capping of fees charged by third-party delivery apps. Services like DoorDash and Uber Eats often charge fees that are as much as 30 percent of the total cost of a takeout meal, which has created a significant financial strain as more patrons choose to eat at home instead of dining indoors. The bill would now cap those fees at 15 percent for restaurants with less than 25 locations in Massachusetts. Similar caps have been passed in other states and cities throughout the US.

“There was nothing the Legislature could have done that would have made a bigger difference to restaurants, and it also doesn’t cost the taxpayers a penny,” said John Schall, the owner of El Jefe’s Taqueria in Harvard Square and Downtown Crossing. Schall said he paid more than $25,000 to third-party delivery companies in December alone at his Harvard Square restaurant.

And owners like Bessie King, of Villa Mexico Cafe in the Financial District, said that the lowered fees would allow her to begin using the delivery services. “As owners of a small, independent restaurant in downtown Boston, I could never afford to offer delivery before, because of the exorbitant margins they took from our business,” she said in an e-mailed statement. “Now, with a fair and truly competitive fee, there is a glimmer of hope after an excruciatingly long, dark time. Now, my mom and I won’t have to make deliveries ourselves.”

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“The delivery app piece is particularly important right now because of the limited dine-in options,” said state Representative Aaron Michlewitz, who helped lead the negotiations for the third-party delivery legislation and whose district includes both the North End and Chinatown — restaurant neighborhoods that have been hit particularly hard by the pandemic. “Takeout and delivery is a very important component in keeping these restaurants alive during the remainder of this pandemic.”

And the new $20 million grant program will work in tandem with the larger program Baker rolled out last month, with restaurants having the ability to apply for funds from both. The goal of the legislative fund is to be a long-term solution to help restaurants as they face challenges in the months and years ahead, Michlewitz said. “We know that this isn’t going to be finished even when the vaccines are rolled out.”

Another victory for restaurants was less high-profile, but still significant, said Luz. It was a change in the technical definition of a waitstaff employee, allowing for servers who are transitioning to management positions within a restaurant to still access the tip pool on the days they’re not overseeing staff. An earlier law denied servers from accessing the tip pool once they began working toward a management role. “It’s a big way that we get people that have career growth in the industry,” said Luz.

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Maws noted that because the bill’s passage took more than six months, it wouldn’t be enough to bring back the many restaurants that have already closed their doors permanently. But after such a long slog, he said, he felt uplifted.

“We don’t have that date of when this is all going to be OK,” he said. “But everything that’s happening that’s positive and allowing us to get some financial aid and forgiveness is just hope, and we’ll take the hope. That’s what’s getting me up and continuing to try to open my doors every single day.”



Janelle Nanos can be reached at janelle.nanos@globe.com. Follow her on Twitter @janellenanos.