Big Changes at Amtrak

A severe curtailment of charter trains. New restrictions on hauling private cars. Elimination of dining cars on some trains. Elimination of the Coast Starlight‘s Pacific Parlor Cars, which the Antiplanner called the only redeeming feature of Amtrak’s long-distance trains. Perhaps even phasing out long-distance trains completely.

These are some of the changes taking place under Amtrak’s latest CEO, Richard Anderson, a former Delta Airlines executive. Amtrak’s previous CEO, Wick Moorman, was in charge for only about a year and the main work he did was to shake up the executive suite to make it operate more efficiently. Anderson, however, seems more willing to take on sacred cows in the name of efficiency. If you love intercity passenger trains, however, the things he is doing are likely to alienate many of the company’s political supporters.

The long-distance trains are only the most obvious example. With them, Amtrak serves all but four states. Without them, it serves less than half the states. If less than half of the members of Congress support Amtrak, Amtrak disappears.

But the dining cars, parlor cars, charter trains, and private car services are politically important too. Though Amtrak reaches hundreds of cities, it now says it will move private cars only to and from forty of them. Though Amtrak has frequently provided equipment for charter runs, it now says will only do so for regularly scheduled runs, not for once-a-year operations. But the people who ride these trains and own private cars are also big political supporters of Amtrak.

Dining cars were always a loss-leader for the railroads. When they competed between major cities such as New York and Chicago or Chicago and Minneapolis, they generally operated nearly identical equipment on nearly identical schedules. Thus, it was little things like the dining car food that distinguished the Twentieth Century Limited from the Broadway Limited or the Hiawatha from the Zephyr.

Today, Amtrak’s competition is airlines and buses. Its advantage over the other modes is that train riders are not stuck in their seats for the entire trip; they can walk to a diner or lounge car and have a decent meal or a nice drink. For example, the current Washington-Chicago Capital Limited has an 80-seat dining car with a kitchen preparing hot meals and a 60-seat lounge car with a coffee shop providing snacks and some microwaved meals. Amtrak plans to eliminate both and serve cold, boxed meals to sleeping car passengers in their rooms and have a 24-seat lounge-cafe car open to everyone. The New York-Chicago Lake Shore Limited will get the same treatment.

Amtrak estimates these changes to the Capital and Lake Shore limiteds will save $3 million a year. But when Amtrak eliminated hot meals on the Acela in 2002, ridership dropped and it lost $3 million in revenue per year.
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Amtrak gets federal subsidies of a billion to a billion-and-a-half each year even though hardly anyone rides it outside the Northeast Corridor. But those who do are loud in their advocacy of shoveling more subsidies into Amtrak’s firebox. However, if Amtrak trains become no more comfortable than buses and offer no better food than airlines, the company will lose that support.

Congress passed a law in 2015 telling Amtrak to end money-losing food services by 2020, and Anderson may be responding to that law. But there are other ways to fix the problem. For example, it could contract out on-board food services to private companies, letting those companies provide more edible food at slightly higher prices served by non-union employees.

As a fiscal conservative, I believe Amtrak should disappear tomorrow. As a railfan, I think that Anderson’s changes may be heading in that direction. It is difficult to know whether I should be happy or sad about that. But I will say, since no one else seems to have said it (though some have implied it), that this is what happens when you put an airline executive in charge of Amtrak.

What should be done? Instead of trying to micromanage routes, food services, and other Amtrak policies, Congress should revamp how it subsidizes Amtrak. Currently, it gives Amtrak a lump sum every year or so with the implicit understanding that Amtrak will maintain service to as many political constituencies as possible.

Instead, Congress should offer to pay Amtrak for every passenger mile it carries. Currently, the subsidies average about 25 cents a passenger mile. I suggest that Congress offer Amtrak 10 cents a mile. Then the debate would focus on how much the subsidy should be, not on where it goes. Amtrak would have an incentive to run the routes that maximize the passenger miles for the lowest subsidies.

Do on-board meal services increase ridership? Then Amtrak would maintain them; if they don’t, it wouldn’t. Do charter trains pay for themselves? Then Amtrak would provide them (and collect 10 cents a passenger mile). This kind of system would make Amtrak responsive to its riders, not to the politicians — which of course is why it is unlikely to happen.