House Transportation Committee Chair John Mica says that Amtrak is losing $84 million a year on its food services. A recent report from the Amtrak inspector general says that at least part of the loss is due to thefts from Amtrak food-service personnel.
Florida Representative Sandy Adams–who, due to redistricting, is facing Mica in this year’s election–says that Mica’s criticism of Amtrak’s losses is “an election-year stunt.” Adams, who is supposed to be a Republican, is critical of Mica’s solution, which is to turn over food service to private companies. Why “put taxpayers on the hook to continue a subsidy to the companies who win the concession bid”? asks Adams.
Of course, the answer is that private companies are more efficient, less likely to have onerous pension and health care liabilities, and will probably have better methods of making sure employees don’t steal from them. Any Republican should know this answer, but Adams’ response to Mica is no doubt an election-year stunt.
Curiously, the Antiplanner recently acquired a 1938 report on “streamline, light-weight, high-speed passenger trains.” The report reviews the early Burlington Zephyrs, Union Pacific City trains, Santa Fe Super Chief and El Capitan, and many other trains.
For each train, the report compares revenues with expenses, one of those expenses being dining-car losses. Except for the Milwaukee Road Twin Cities Hiawatha and two or three other trains, all of the railroads reported dining-car losses for all of their train. Such losses were probably expected partly because the costs of serving food on a moving train are higher than in a stationary restaurant and partly because there are too few people on many trains to provide the volume sales that allow many restaurants to make money.
This doesn’t justify the level of Amtrak’s losses or the theft of money and goods by Amtrak employees. But it puts the losses in perspective: if you have passenger trains with food service, the food services are almost certain to lose money. Yet, at least for longer train rides, those food services are expected by passengers. The losses can be justified, but only if fares earned by the trains themselves earn enough profits to make up for those losses. Amtrak’s don’t, so the food service losses are at best a symptom of the real problem, which is that Amtrak has allowed its costs to go out of control and has failed to remain competitive with buses, planes, and other alternatives.