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.
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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.
“Why “put taxpayers on the hook to continue a subsidy to the companies who win the concession bidâ€? asks Adams. Of course, the answer is that private companies are more efficient…”
I agree that contracting out services on the public dime is often much better than running them in (the public) house, but this seems like a slippery slope for antiplanners to be on. After all you’re antiplanners not quasi-planners.
Yesterday a commenter posted a video decrying CA spending money on HSR and in the same breath congratulating Midland, TX for handing over a $10 million check to a private CA based company to move to their community. I get that $10 mil is peanuts compared to HSR budgets.
What I don’t get is how a bunch of absolutist antiplanners, who want to end all subsidies for passenger transportation in America, can advocate for small cities handing over buckets of money to private companies or tax dollars going to a private food service that we know can’t be profitable.
So which is it? Is the antiplanner argument is all about how we can make our subsidies more effective and efficient or ending subsidies altogether. If you don’t make a choice I have no choice but to call you out as “anti-planning-that-results-in-outcomes-we-don’t-like-ers.” Guess what? We’re all members of that group.
The Antiplanner wrote:
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.
Who oversees and manages the workers on Amtrak trains? Are they food service professionals or are they people who gained those jobs through Amtrak’s union seniority system?
This doesn’t justify the level of Amtrak’s losses or the theft of money and goods by Amtrak employees.
Is there no auditing or internal control at Amtrak? Other government agencies where employees handle money (for example, the U.S. Postal Service and the Bureau of Engraving and Printing) monitor those workers that handle cash very closely.
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 is supposed to earn money (at least from operations)? You are kidding, right?
Even when the cost of capital (as in rolling stock) is 100% taxpayer-funded?
So which is it? Is the antiplanner argument is all about how we can make our subsidies more effective and efficient or ending subsidies altogether.
I realize you’re trolling, but I’ll respond anyway.
Why can’t it both? My preferred arrangement in this case would be that intercity passenger rail service be provided privately, and that that private operator could decide whether or not it was worthwhile to provide a money-losing food service.
Of course, in a second-best world where passenger rail service is nationalized and subsidized, and politics plays a large role in resource allocation, the best we can hope for is to limit the losses when and where the service is provided. In this case, it means contracting out the provision of food services, much like the airlines do.
MJ:
Amtrak contracts out food service provision to Aramark, just like the airlines. Then it serves food with its own staff, just like the airlines.
What was your point exactly?
Thanks for the response MJ. You obviously don’t think in the absolutist terms that others do ’round here.
As for “trolling.” This is not my intention (though sometimes I can be provoking). I love this blog but am recently frustrated with nit picking of data, twisting of statistics and the two-faced politics displayed by both antiplanners and pro-planners.
I would like to see the conversation go below the surface and get at the root of the ideologies that are opposing one another. There is so much about the antiplanner position I don’t understand and I’m not sure another post about passenger trains is going to clarify anything.
Randall:
It IS a stunt. The food service is already contracted to Aramark, except that the on-board staff is Amtrak employees. Aramark provides all the behind the scenes work right up to stocking the trains.
How can you privatize something that is already privatized?
As you said, what is really being sought is to cut the wages of the on-board staff, which really means to turn it into something like the cruise business worked by a bunch of foreigners and illegal aliens. The on-board staff is hardly paid lavishly – $20 per hour or so. On the long distance trains, they travel the length of the route, which can mean a week away from home in some cases. No one wants to do that for $10 per hour.
There are undoubtedly ways to cut the losses on this, including looking creatively at the need for a diner and a lounge, cross-staffing, chaging hours of operation in the dinenr to sell more food, and even tweaking schedules to eliminate meal sittings and short turning on-board crews, but none of those things involve a race to the bottom in wages.
Perhaps Mica should only be paid $7.25 an hour with no benefits?
The food service is already contracted to Aramark, except that the on-board staff is Amtrak employees. Aramark provides all the behind the scenes work right up to stocking the trains.
Aramark provides food service at quite a few sports venues around the United States, presumably using its own workers. I suspect that it makes money at those.
How can you privatize something that is already privatized?
Please explain – why do the on-board food personnel need to work for Amtrak? It certainly makes more sense to me for them to work for an experienced (and private-sector) food service provider than it does for them to work for Amtrak.
Most of Amtrak’s operations could be subcontracted. There are already private contractors operating suburban trains in the USA.
CPZ:
Airlines don’t make any money either. They’ve lost tens of billions since deregulation. Why not get rid of flight attendants and bring in minimum wage contractors?
Maybe Amtrak on board staff should stay Amtrak for the same reason flight attendants need to be airline employees.
The underlying and most important issue here is that Amtrak has no idea what it wants to be when it grows up, despite being over fourty. The core of this identity crisis is based off of Amtrak’s need to sell itself based on the changes in the political winds. This means that Amtrak has to be everything to everyone.
The problem with this is that when you try to be everything, you fall short and end up being good at nothing. IE Amtrak is running slower trains with much poorer quality food service, all while losing more money every year. Focusing on the food service losses is just rearranging the deck chairs on the Titanic.
Mica is a jack ass, roads don’t make money though he isn’t trying to get rid of them.
The got to be kidding. Perhaps the reason for the revenue lost is we the customers are starting to bring our own food instead of paying the astronomical prices for vending machine food. on Amtrak trains. I have to take the Amtrak Cascades trim from Portland to Tacoma. My truck will not even make half way. the train looks will worn and badly in need of updating. I wounder it with just pay extra and flying to Seatac then taking the bus back to Lakewood WA.
I have to get to Missoula, MT in the next week. I could ride Amtrak to Whitefish and try to get a ride to Missoula. But even if I did that, in addition to the 14-hour, overnight trip, the Amtrak site warns me to expect five-hour delays because of the heat. So it’s at least 19 hours plus a drive.
Or…if I fly, it’s 90 minutes, and it gets me two blocks from my destination.
Guess which one I’m taking.
I really don’t know what the problem is as I love to ride Amtrak and love the food service. I really don’t understand why they say they lose money but then again anything the government seems to try and run never works out. I know it certainly cost a lot of money to go from DC to LA with a sleeper but it sure is stress free and I love it. Maybe some daily auditing may work but then again price things so that money will be made. What I don’t understand if the freight trains can run tons of freight for pennies on the mile, why can’t Amtrak. I think somebody is feeding the public a load of bull crap. Every Amtrak I have ever ridden have always been full, the dinning cars have always been full and I am also willing to bet that they could add more sleeper cars and make money but it seems as if there are only a certain amount of sleeper cars to go around and there are no spares, so that is a problem. I like Amtrak and if need be, let the tax payer pay for the high speed lines and let’s get it done. Every country in the world has high speed rail except for the USA, what is the problem. It seems back in the day the RR Barons certainly got rich running railroads and buying land. I think something is terribly wrong with the system in the United States. I will take the train any day compared to the airlines
You’re new here, and to see what the problem is with HSR, try reading some previous posts.
I take an airplane any day compared to Amtrak. In a recent comment, I mentioned how I had to get to Montana yesterday. My choices were the Greyhound (sketch central with a late-night layover in Spokane–no thanks; too bad Bolt Bus only goes from Portland/Seattle/Vancouver) or flying. I could have taken the train to Whitefish and tried to get a ride, if I wanted to spend nearly 21 hours getting to my destination instead of the hour and 15 minutes it took on the plane.
The flight was full and the model of aircraft has lower GHG emissions per passenger than driving. And it doesn’t have to slow down when the rails get hot. And it goes more places.
Why anyone would choose Amtrak instead makes no sense, unless it’s for nostalgic purposes.
Toilet paper costs money.
So would you testify against toilet paper too?
Frank if you drove or took the bus to Missoula would that have been nostalgic too?
If Amtrak doesn’t serve Missoula, then it doesn’t serve Missoula.
Hey I don’t expect you to drive or go by bus from Seattle to Honolulu either.