Freakonomics Quorum: Can Amtrak Ever Be Profitable?

Amtrak’s ridership and revenue has been steadily increasing over the last 10 years, and 2011 set a new ridership record with 30.2 million passengers, and $1.9 billion in ticket revenue. But, even though it took in $1.42 billion from Congress last year, it still manages to lose $1 billion annually. This is hardly a new development. Amtrak has a long and storied history of functioning at a loss despite government subsidies.

So, as we enter what appears to be a new era (maybe?) of government austerity, it seems worth asking if Amtrak can ever turn a profit without government help. We rounded up some people who pay attention to this issue and asked for their ideas to fix Amtrak, if it can be fixed at all.

Thanks to everyone in the Quorum for participating — and as always, let us know what you think in the comments section.

Eric Morris, a regular contributor to Freakonomics, is a transportation scholar at UCLA. His work focuses on transportation and well-being, transportation equity, transportation finance, and transportation history.

AMTRAK: OFF TRACK

I have a soft spot for the Zeppelin. This graceful ocean liner of the sky is quiet, clean, energy-efficient and—despite vicious Hindenburg-related media aspersions—safe. Whether providing us with spectacular aerial views of our favorite sporting events or bombing London, these delightful dirigibles have brought joy to millions. However, despite my personal love of the airship, I do not believe that government should be in the business of spending billions of dollars to support it when riders seem curiously indifferent to its merits. Supporting an unprofitable transportation mode because it’s “cool” is not a sound basis for public policy.

It is true that there are travelers out there who enjoy taking Amtrak. On rare occasions I have been one of them myself. However, society has no interest in paying for benefits—in terms of things like comfort, convenience or time savings—that are enjoyed by travelers. In our market system, which, recent speed bumps aside, is working quite well for us, the traveler himself should pay for the benefits he receives. If government has to step in and pay to produce a product customers won’t pay for, it is a sign that the product isn’t a particularly good one and is destroying wealth and resources that could be more profitably deployed elsewhere.

Thus subsidies for Amtrak are justified only if they bring broader benefits to society. Do they? Are oil rig workers in Texas or accounts payable clerks in Tacoma somehow better off because Joe Biden enjoys taking Amtrak back and forth between Washington and Wilmington?

The answer is almost certainly that any purported societal benefits from Amtrak do not match its subsidies, or even come close. Rail backers make a big deal about how much road and airport congestion their pet mode is relieving. But traffic congestion, while a big problem inside cities, is rarely an issue on highways between them. As far as airport congestion goes, in my experience I have never been troubled by a shortage of suitable flights. (Anyway, a better solution to airport congestion would be to modernize our air traffic control system, which at the present time is using technology not much more advanced than the abacus and the astrolabe.) Also, it’s not as if Amtrak is truly absorbing a lot of traffic from the other modes. In most of the country—even where it does exist—Amtrak’s ridership is about as significant as a rounding error. Even in the Northeast corridor, the one place where it is truly a meaningful mode, it accounts for only about 6 percent of intercity trips (driving accounts for 89 percent).

Are there any other benefits to non-riders that make subsidy worthwhile? Probably the only substantial one might be environmental, in terms of air pollution and greenhouse gases. It is true that moving things along rails requires less energy than moving them along roads or through the air. However, in most of the country Amtrak runs diesel locomotives which aren’t much better than internal combustion or jet propulsion. In the Northeast Corridor service is electrified, which is better. But even pro-Amtrak calculations (see this) find the pollution benefits are nowhere near Amtrak’s subsidy. And in fact, intercity buses are probably much cleaner than trains because the vehicles are lighter and generally travel filled closer to capacity.

Amtrak defenders like to make the argument that roads and air travel also receive subsidies. Sometimes it’s claimed that the total of these modes’ subsidies and externalities are equal to those of Amtrak. But my reading of the numbers is that this is questionable, and even if it were true it is a pretty weak argument. The fact that Fidel Castro is nicer than Kim Jong-Il is (or was) hardly a ringing endorsement for Cuban communism.

It isn’t hard to see what accounts for Amtrak’s failing to come anywhere close to covering its costs. Americans are not crying out in agony due to a lack of transportation options, and, simply put, passenger rail doesn’t have much to recommend it compared to the competition. On longer-distance trips, flight is vastly faster. The car isn’t much slower, is fairly inexpensive (particularly with multiple passengers, common on intercity trips), and provides far greater convenience, including door-to-door service and the use of a car when the traveler arrives at the destination. Intercity buses also aren’t much slower than Amtrak, are vastly cheaper, and aren’t that much less comfortable once they are on the highway. In terms of passenger transport, trains are a 19th century technology that we are attempting to apply to a 21st century problem.

Does this mean there is no room for rail in America? Far from it. Thanks to deregulation in 1976 and 1980, in the last few decades rail transport has been one of America’s great transportation success stories. However, this is when rail carries coal as opposed to commuters. Thanks to its characteristics (it is fairly slow and inconvenient but is energy-efficient and reasonably priced compared to trucks), rail is ideal for transporting many classes of freight, particularly cargoes that are heavy, low-value, and not particularly time-sensitive. Think bulk commodities like wheat, iron ore, or particularly coal. Passengers are light, high-value, and very time-sensitive, so it’s easy to see why rail isn’t right for them. Thus freight rail shipments have skyrocketed while passenger rail trips have stagnated. It is instructive that one of the first things the railways did after deregulation was dump unprofitable passenger service.

This is particularly important because freight and passenger rail transport do not go well together. Coordinating different types of trains traveling at considerably different speeds but sharing the same tracks is not particularly easy. This might be why Europe moves lots of people by train but the overwhelming share of its goods by truck, while in the U.S. the pattern is reversed. Perhaps it is impossible to make one rail infrastructure serve two masters effectively.

Harsh as it sounds, my answer to the question of how to keep Amtrak from losing money is to eliminate subsidies and perhaps privatize the operation. Highly uneconomical service in most of the country will vanish, but frankly there are few riders who will notice and even these have plenty of other transportation choices. It is possible that in the Northeast Corridor train travel could have a fighting shot at standing on its own two feet in some form. But if it can’t, and we decide cars, buses, and planes aren’t serving the corridor adequately, I’d suggest we give up on trains, fold Amtrak entirely, and introduce legislation to found AmZep instead.

Robert Puentes is a senior fellow with the Brookings Institution Metropolitan Policy Program where he also directs the Program’s Metropolitan Infrastructure Initiative. He is an expert on transportation and infrastructure, urban planning, growth management, suburban issues and housing.

In Washington and across the nation, there are ongoing deliberations about which transportation and infrastructure assists will drive the next American economy. A particularly noisy debate involves the future of the nation’s passenger railroad network and where, in what form, and who should make these investments. These and other discussions have once-again raised questions about America’s national passenger rail system—Amtrak—which has faced a tumultuous future ever since its creation in 1971.

Despite the haranguing, Amtrak continues to enjoy support from many in Congress and is carrying more passengers than ever. In fact, it experienced a significant jump in national ridership after 1997 when a bipartisan federal commission was established to make recommendations to help Amtrak reach operational self-sufficiency. Since then, Amtrak’s total boardings and alightings have increased 34.9 percent. To put this in perspective, it more than doubles population growth (14.6 percent) over the same period and exceeds real GDP growth (29.5 percent).

Part of the reason is that Amtrak’s growth mirrors the rise of America’s largest metropolitan areas, many of which are served quite well by rail. In fact, half of Amtrak’s ridership comes from just five large metros: New York, Washington, Philadelphia, Chicago, and Los Angeles. These places are generally well positioned geographically with good connectivity to other key metros. They are also home to the nation’s largest aviation delays and highway congestion with which travelers in these metros have to contend. Indeed, Amtrak says it has a whopping 62 percent of the air/rail market between New York and Washington, and 47 percent of the market share between Boston and New York.

Why does Amtrak work in these places? For one, research suggests that for intercity rail corridors to be successful they require competitive travel times especially compared to air travel. Amtrak has a built-in benefit in some metros by providing direct service close to the heart of cities and business districts whereas air travelers must contend with decentralized airport locations, security lines, and early gate arrival requirements. And in terms of length, research based on European results finds that the optimal distances for travelers to shift from air to rail is around 300 miles or so. (Washington to New York is about 250 miles.)

It is these and other short-haul routes — some of which are aided by state financial support – that are the engines of Amtrak ridership. Indeed, when only considering corridors of 400 miles or less these short-haul routes consistently generate over 80 percent of all Amtrak ridership.

This interactive map by Pew Chartiable Trust’s Subsidy Scope provides an excellent illustration of how short routes that serve major metros perform better than other routes. A few, like the Acela and Northeast Corridor trains, produce greater profits than losses (including costs such as depreciation) while the opposite is true for super long haul routes like the Sunset Limited.

Of course, the question of government subsidies to all modes (highway, air, transit, bicycle) is an ongoing and complex debate.  But as it relates to Amtrak it does seem clear that focus and prioritization on short-haul corridors that connect our nation’s major metros is critical to its long-term success.

 Yonah Freemark is a journalist who writes about urbanism and transportation. He founded and continues to publish The Transport Politic. He has contributed to Next American City, The Atlantic Cities, Dissent, and Planning.

Compared to the intercity railroads of virtually every other developed country — and even those of many developing countries — Amtrak under-performs. Its services are simply too slow, too expensive, and too unreliable to attract a significant share of travel in the United States.

Yet the alternatives being hammered out by opponents of the nation’s railroad, such as privatization and a reduction in government subsidies, are a collective non-starter. Experience abroad suggests that successful rail systems – in fact, most transportation systems – require significant government aid, especially when it comes to capital projects.

Assuming that we believe there is a public interest in maintaining a functioning mobility network, then, there is no alternative but to continue federal funding for transportation. Railways offer the potential for uncongested service, are ecologically responsible, and are beneficial to the central cities they serve; the same cannot be said of rival automobile and aviation systems, which are plagued by delays, pollute massively, and encourage suburban sprawl. Train links must form an important element of America’s future multi-modal transport network.The question is thus not whether to cut off subsidies to U.S. railway operations entirely, but rather whether to continue support for Amtrak or provide aid to private companies that could take over its physical assets in the Northeast Corridor and its operations throughout the country, as has been suggested by House Republicans over the past few months. The latter option was pioneered by the United Kingdom in the mid-1990s, but the results were hardly laudatory as services became increasingly unreliable. The British government responded with the re-nationalization of that country’s passenger rail infrastructure in 2002, placing it back within the European mainstream.

U.S. intercity railway operations are underused and underserved compared to their British counterparts, due to decades of disinvestment and an overwhelming – and destructive – emphasis on automobility and aviation. There is little reason to suspect that it would be in the nation’s interest to privatize the ownership of the railway infrastructure itself, since that has proven to be such a failure in similar conditions abroad. The American government, working with the states, must maintain ownership over the trackage.

But how about operations? In the U.K., passenger services are now provided by private companies. Yet on many corridors, operations are heavily subsidized by the public sector, and even some of the supposedly profitable lines have been abandoned by private operators, only to be served by a publicly owned holding company. Overall subsidies to passenger rail in Britain are far higher now than they were when the railways were run by the nationalized company, British Rail. It seems unlikely that the far less-used American intercity railway network — outside of the most-frequented segments of the Northeast Corridor — could be profitable for private enterprise; while subsidies to Amtrak may be unpalatable, subsidies to less accountable private companies seem even less desirable.Thus an improving American railway network requires a functioning Amtrak.

None of this is to suggest that Amtrak should not strive towards increasing speeds, decreasing fares, and improving reliability – far from it. The Obama Administration’s investments in intercity rail will bring faster and more dependable Amtrak services to states like Illinois, Michigan, and North Carolina within the next five years. Similar improvements over the past decade have led to dramatic increases in the company’s ridership along such routes as California’s Capitol Corridor and Pennsylvania’s Keystone Line. In addition, the national railway company must invest in increasing its capacity, a step it is already taking with new cars for regional services and its Acela trains on the Northeast Corridor. More room on trains will mean increasing efficiencies of scale, potentially lowering ticket prices for consumers. Finally, Amtrak must make an effort to reduce capital construction and operations costs, both of which are higher than those of similar railway companies overseas. Without this step, the country will continue to be saddled by railway operations that cost too much for an already overburdened government. The road ahead for American railroading will continue to be paved by subsidies. But the strong train system that will result if properly planned will be beneficial to riders and the nation as a whole.

Nate Berg is a journalist covering cities, the environment and urban planning. He has written for a variety of publications, including The New York Times, Wired, the LA Weekly, and many others. He is a staff writer at The Atlantic Cities blog.

In 2002, five years after Congress asked Amtrak to find a way to not require federal operating funds, David Gunn, five weeks fresh as Amtrak’s new president, flatly told a Senate committee what everybody already knew: “Amtrak will never be profitable.”

The passenger rail service, needless to say, did not meet its mandated goal of breaking free from government subsidies. This shouldn’t be a surprise. The vast majority of the world’s public transit systems rely on government subsidies. Though there are some passenger rail lines in Europe and Asia that can operate at a net profit largely without ongoing government support, train lines are more often government services than private businesses. To call on Amtrak to make money ignores the fact that it was created and still today operates as an infrastructural service. The real issue is not so much that Amtrak will never be profitable, but rather that it shouldn’t have to be.

Amtrak is infrastructure in the truest sense of the word. It’s one of the physical structures and services that organizationally enable the functioning of U.S. society. Like the interstate highway system or the postal service, Amtrak provides a service that (to an arguably lesser degree) serves and benefits residents and businesses. These services may not have direct dollar returns, but to say they don’t fill a vital need would be ignorant. Calling on Amtrak to go it alone prejudiciously holds the service to a different standard than other government services.

The return on investment for these services doesn’t have to be direct, and for transportation modes like passenger rail it often isn’t. Think of transportation as a line connecting two dots. The economic value of this connection is captured not by the transportation method itself, but by the people and places it connects. The value is in the dots, not the line. But without the line, the two (and in reality many) dots would have trouble sharing and compounding their relative economic powers.

These dots, the mid and endpoints of these transportation corridors, though, are not just single businesses or factories. They are cities, which are increasingly the centers and enablers of economic power. And while it’s true that Amtrak lines aren’t the only ways to get from one city to the next, they can play a valuable role in allowing people and services to travel between these economic centers in as many ways as possible.

In their new book Megapolitan America, Arthur C. Nelson and Robert E. Lang note that about 65 percent of the U.S. population lives within 23 clusters of metropolitan areas. This level of concentration shows the significance of cities, but also their interrelatedness. As groups of cities and their suburbs grow more populous, the physical transportation connections between them – highways, airports, Amtrak lines – become even more important. Rather than being seen as separate, Amtrak should be considered a part of the transportation network the government has enabled to connect these places.

Certainly Amtrak could be operated in a way that better met the needs of our increasingly mobile and interconnected society. But to single it out as a money hog amongst a broad swath of government-subsidized infrastructures and services is to turn a blind eye to the fact that the provision of such services, profit or no, allows the country’s economy to function.

Stephen Smith writes for Forbes on the politics, economics, and history of urbanism. He formerly wrote for the Market Urbanism blog, Reason, and the National Review.

In many ways, Amtrak’s problems are bigger than itself. They have their roots in one of America’s most enduring trends, which is population dispersal – whether it’s through westward state-funded canals and railroads of the early days of the republic, or twentieth century automobile-based suburban and exurban sprawl. For transit of any kind to be truly revived, land use patterns will have to be significantly altered, along with some of the most important tenets of American culture.

That said, the United States is taking tentative steps towards re-urbanization, and intercity travel is generally the most profitable kind of passenger rail (perhaps because there isn’t as much political pressure to keep cap fares). The consensus in the European Union and Japan is clearly in the direction of privatization. Even the privatization-averse Swiss Federal Railways aims for profits on its main intercity lines, while achieving remarkable gains in ridership over the past decade. Liberalization seems to be the future of intercity rail (to say nothing of the past), and there is no good reason that American politicians shouldn’t begin the process towards privatization now.

The process, however, will be a long one, with privatization being the end goal rather than the starting point. The first thing that must be done is not even management-related, but rather regulatory: the Federal Railroad Administration’s approach to rail safety must be radically restructured. The FRA can no longer be allowed to lag behind European and Asia regulators, foisting unrealistic and outdated safety mandates on all mainline passenger rolling stock in the US, from Amtrak trains to regional/commuter railroads. Our unique standards for bulk and other more technical aspects of rail car design should have been abandoned half a century ago.

America’s FRA-compliant obese mainline trains are slower, more expensive, and less reliable than modern European and Asian designs. Getting this right is the most important step in the whole process, partly because it will help “commuter” services like the Long Island Railroad and Caltrain. Good intracity mass transit links are a key to good intercity rail, and FRA regulations are more onerous for commuter railroads than they are for Amtrak.

Next, management must be given much more latitude when it comes to labor issues. They should be able and willing to negotiate (and risks strikes, if need be) over everything except wages and benefits, with the minor proviso that pensions may need to be reigned in. Managers must, however, be given control over work rules. A century ago, when railroading was a grueling and deadly profession, work rules were an essential negotiating point. But now they’re lucrative sources of indirect compensation, and ripe for featherbedding. There may come a point in the future when salaries and benefits should be negotiated down as well, but currently it’s a minor issue compared to work rule reform, and is not worth the political will it will take to tackle.

Once management is empowered to take control of the organization, we should expect a better financial position, and it will finally be time to begin thinking about privatization. The reason deregulation must come first is that if we were to privatize Amtrak first, as Rep. John Mica‘s plan earlier this year would have had us do, the privatized firm would just face the same difficulties that Amtrak’s predecessors faced before nationalization in 1971.

But even privatization is not a straightforward affair. The first decision to make is whether to go for the European model of forcibly separated infrastructure and operations, or to sell off the railroads as an integral unit, which is the path that Japan and the United States have historically taken. Unless the E.U.’s open access policies are wildly successful by the time deregulation is finished, it would probably be best to stick with the integral model.

But beyond that, we have to decide how to break up Amtrak. The Northeast Corridor is an obvious candidate for splitting off and selling, because it’s both the most profitable route, and the only one whose tracks Amtrak actually owns. The rest of the network will almost certainly need subsidies to survive, although popular routes like those in California should be further separated from inland services, so that in case they are seen as profitable in the future, they won’t be held back by the morbid routes away from the coasts and major cities. To what extent America outside of the Northeast gets subsidies is a political question, but it should be strictly segregated from the viable Northeast Corridor.

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COMMENTS: 86


  1. Chris says:

    Mr Morris, do you also advocate eliminating the federal subsidies that make passenger air travel affordable/possible? In some cases these subsidies rise far about $1,000/ticket.

    Well-loved. Like or Dislike: Thumb up 54 Thumb down 9
    • Mike B says:

      Don’t forget that a few years ago Greyhound drastically cut back on many of its rural mid and far Western routes leaving many communities without any sort of common carrier transportation. An accessible transportation network provides a freedom of movement and opportunity that more than makes up for the modest investment involved.

      Well-loved. Like or Dislike: Thumb up 33 Thumb down 11
      • human mathematics says:

        Greyhound partners with Jackson Lines to jointly cover the Western areas around me (southern South Dakota).

        Thumb up 4 Thumb down 1
    • RANDY says:

      You forgot to mention our roads and ports.

      Thumb up 1 Thumb down 2
  2. human mathematics says:

    I would have liked to hear more specifics about what privatization might look like, partial privatization experiences in other countries, etc.

    Too much obvious static analysis in my opinion. What are the options on the table — given the US’ massive investment — to reduce subsidy, auction off parts (who would be the buyers and what would they probably do with the rail?), and so on?

    Thumb up 6 Thumb down 2
    • Mike B says:

      Privatization would work like any other. Government provides the same subsidies, but instead of all of it being returned for public benefit, some is siphoned off for private gain. Duh.

      Well-loved. Like or Dislike: Thumb up 37 Thumb down 19
      • human mathematics says:

        Mike B, not every industry is reducible to the same one or two dimensions. That’s a classroom exercise, not public policy.

        Well-loved. Like or Dislike: Thumb up 13 Thumb down 8
    • Andrea says:

      Did you read Stephen Smith’s response? He directly addressed all of the areas you mentioned.

      Thumb up 2 Thumb down 3
  3. Mike B says:

    Why don’t you also ask when the nation’s highways will become profitable? Last I looked into it the Federal Government spent 20 billion dollars a year more on road operation and capitol projects than it collected in fuel taxes. Rail is the only mode of transportation in the United States where the operators are ultimately responsible for the construction and upkeep of the physical medium on which their vehicles travel. Airports, canals and highways are all publicly owned and maintained. How can one expect rail to possibly compete when the government heaps such large indirect subsidies on its competitors?

    Also for the record it should be known that most of Amtrak’s much maligned long distance service does not in fact lose money as is so often reported. Those trains cover their variable costs, but due to various budgeting rules Amtrak must “assign” portions of its overhead to each route thus creating a fictional loss. Cutting long distance trains may actually have the effect of widening revenue shortfalls as fixed overhead is covered by fewer lines.

    Well-loved. Like or Dislike: Thumb up 91 Thumb down 12
    • brent says:

      Assuming your $20 billions dollars is correct, which you do not source, the “huge” subsidy for roads can be eliminated by increasing gas taxes by $0.07/gallon. The US has consumed around 140 billion gallons of gas per year for many years now.

      http://americanfuels.blogspot.com/2011/02/2010-gasoline-consumption.html

      2010 – 3,297,528,000 barrels x 42 = 138,496,176,000 gallons
      2009 – 3,283,730,000 barrels x 42 = 137,916,660,000 gallons
      2008 – 3,290,057,000 barrels x 42 = 138,182,394,000 gallons
      2007 – 3,389,269,000 barrels x 42 = 142,349,298,000 gallons
      2006 – 3,377,174,000 barrels x 42 = 141,841,308,000 gallons
      2005 – 3,343,131,000 barrels x 42 = 140,411,502,000 gallons
      2004 – 3,332,579,000 barrels x 42 = 139,968,318,000 gallons
      2003 – 3,261,237,000 barrels x 42 = 136,971,954,000 gallons
      2002 – 3,229,459,000 barrels x 42 = 135,637,278,000 gallons

      Thumb up 8 Thumb down 6
      • onempo says:

        When talking about highway subsidies, people often focus solely on Federal highway expenditures, mostly funded by user fees, and don’t account for state and local roads that get funding from other sources.

        Subsidyscope (Pew Charitable Trust) reports that nearly half of highway construction & maintenance is not covered by user fees. In 2007, 51 percent of the nation’s $193 billion set aside for highway construction and maintenance was generated through user fees. The rest came from general revenue or bonding. So, the annual subsidy is much higher than $20 billion.

        Even the Pew study doesn’t take into account indirect highway expenditures from general funds like law enforcement and emergency services that could be quantified, and other costs borne by society that are not easily quantified.

        Well-loved. Like or Dislike: Thumb up 30 Thumb down 2
      • Mike B says:

        Well get back to me when they raise the gas tax by 7 cents. Keep in mind however that Amtrak has gotten about 20-30 billion in Subsidies over its entire 40 year existence. Roads have been getting about that much per year for at least the last 5 or so years.

        Well-loved. Like or Dislike: Thumb up 18 Thumb down 7
    • David says:

      The federal government is only one level of public funding for roads, there is also state, county & municipal.

      Roads don’t make money or else the road in front of your home would have gone bankrupt years ago!

      Thumb up 6 Thumb down 2
  4. human mathematics says:

    I also would have liked to see reference to the graveyard spiral. In domains where the public provides requisite goods alongside private enterprise, like the post or certain kinds of insurance, the public is often stuck serving the most expensive customers (USPS delivers to every house, every day; FedEx does not. Likewise, state governments insure the uninsurable with a super-expensive auto insu. plan). Is that what’s going on with rail?

    Well-loved. Like or Dislike: Thumb up 13 Thumb down 3
    • Mike B says:

      The most damaging scenario would be for Amtrak to provide “open network access” to private competitors. Amtrak doesn’t own much track outright except in the Northeast Corridor where it can use its monopoly to charge a premium price for its rail service (with limited commuter rail alternatives). Maintaining the Northeast Corridor is insanely expensive (last number I heard was $700 million dollars a year) and if a partial privatization scheme were enacted it would probably take the form of some train operating company paying Amtrak some regulated amount to run on the same route. Result would be the private competitor undercutting Amtrak’s fares and leaving Amtrak on the hook to maintain the corridor without the revenue it used to rely upon.

      This was generally the model in Europe where train operators are able to show a profit when the often Nationalized infrastructure companies loose billions of Euros a year. It’s basically the airline model of public airport ownership and private plane ownership, only rail lines cost a lot more to operate than airports. Without the route monopolies to subsidize universal service mandates it becomes another transfer of public resources to private gain.

      Well-loved. Like or Dislike: Thumb up 14 Thumb down 6
  5. assumo says:

    If the highways were privatized and every trip bore a toll, rail would be able to compete without subsidy.

    Well-loved. Like or Dislike: Thumb up 62 Thumb down 6
    • John B says:

      Hidden due to low comment rating. Click here to see.

      Disliked! Like or Dislike: Thumb up 18 Thumb down 23
      • Brad DFL says:

        Why not have publicly owned tolls? I think we should, the current Soviet style road rationing (as much as you can handle) is what causes shortages (congestion). We need to get rid the Socialistic status quo and move toward a market based system that bases road access on price.

        Hot debate. What do you think? Thumb up 11 Thumb down 10
      • Mike B says:

        The only privately operated toll road I am aware of is the Dulles Greenway that has been suffering from rent seeking behavior on the part of its operators resulting in under utilization of the new road as drivers stick with the free public alternatives.

        http://en.wikipedia.org/wiki/Dulles_Greenway#Dulles_Greenway

        Privately run transport infrastructure and universal service goals generally run at odd with eachother. Without strong regulation or outright public ownership the building patterns will not serve the broader needs of the community. For example in Philadelphia the railroads and transport companies would compete to serve wealthy areas, but completely neglect the poorer ones. This resulted in some parts of the region having duplicate rail services and others having none, hampering development efforts in the century since those original decisions were made.

        Basically if you want universal service your two options are to implement some sort of cross subsidization scheme with local monopolies or let the private sector cherry pick the profitable routes and directly subsudize the others. Frankly I find the former preferable to the latter.

        Well-loved. Like or Dislike: Thumb up 16 Thumb down 6
      • Andrea says:

        Mike,

        Most of the Italian Autrostrade is composed of privately operated toll roads.

        Thumb up 4 Thumb down 1
      • onempo says:

        Private toll highways are only practical for heavily traveled major arteries. Privatization of the state and local streets/roads (necessary feeders to the major arteries) would have few, if any, takers. Construction and maintenance of these roads would still need subsidies, and continue to strain government budgets.

        Thumb up 2 Thumb down 2
      • Chad says:

        Actually, almost all tollways were built with government money, financed with government-backed low-interest bonds, don’t pay property taxes, get a cut of the gas tax at their islands, charge monopoly rents at the islands, and benefit tremendously from any of a hundred subsidies to their automobile and truck driving customers. And of course, these tollways wouldn’t last for a minute if they didn’t have a heavily subsidized network of money-losing feeder roads.

        There are plenty of profitable train SYSTEMS all around the world. I take one to work every weekday. At best, only a handful of roads pay their own way.

        Thumb up 6 Thumb down 3
  6. Mark says:

    Regarding Morris’s aside about the air traffic control system… Although modernizing the technology would be a welcome development, the true bottleneck is runway capacity. We need concrete more than we need capacity in the air. Congestion is a problem on the airport grounds, not in the air between cities.

    Well-loved. Like or Dislike: Thumb up 19 Thumb down 2
    • ConcernedAboutWinnipeg says:

      Perhaps expanding inter-city rail capacity and frequency for shorter (50-500 mile) trips would be a better investment than expanding airport capacity. If shorter flights can shift to rail, then capacity can be opened up for longer haul flights.

      Well-loved. Like or Dislike: Thumb up 8 Thumb down 1
      • onempo says:

        Same goes for expanding highway capacity. Here in Delaware, we got a new major highway from I-95 to Dover in 1995. Only 16 years later, the northern end is at capacity. Now they’re proposing at least $100 million to add a lane. Fortunately, there are a few officials who can see this rinse-and-repeat can’t go on forever. They’re going to study the feasibility of running passenger rail downstate. We’ll see how far it gets.

        Thumb up 5 Thumb down 2
  7. human mathematics says:

    I find Stephen Smith’s comments the most relevant and specific. Although cleverness and lucidity are displayed by all.

    Thumb up 4 Thumb down 5
  8. Enter your name... says:

    If I were designing the transportation system from scratch, I’d replace all of the small airports with rail stations—and those rail stations would lead directly to major airports, which would stop wasting valuable landing slots for little turboprop commuter flights.

    It would make far more sense for the people in Cedar Rapids, Iowa to hop on a train for the 250 miles to Chicago or Minneapolis/St Paul than to build and maintain that little airport, which puts about two little planes an hour into the air during the day (and nothing before 7:00 a.m. or after 9:00 p.m.).

    I’d personally prefer train travel to air travel, except that if I’m traveling outside the range of the local bus/light rail range, it’s extremely unusual for me to need to travel less than 2,000 miles at a hop, and that would take a long time even on a high-speed express train. But if an air/rail combination was possible—the long leg on a big jet and everything else on rail—I’d choose that in a heartbeat.

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    • Jake says:

      As someone who lives in Cedar Rapids, IA. I agree with you 100%, with the provision that once I jump on the train in Cedar Rapids heading for Chicago or Des Moines, I don’t have to go through security checkpoints at the airport all over again. The nice thing about leaving from a small city is that there isn’t a huge swarm of people trying to get into the airport at once, so you don’t always need to show up 3 hours early for a flight.

      I’m pretty sure that something like you described exists in Germany between Stuttgart and Frankfurt, where you don’t even need to get your bags off the plane once you land in Frankfurt, you just jump on a train, and your bags follow you.

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      • Enter your name... says:

        I’ve heard that the same, sane system exists in a major Asian city. I can’t remember whether my friend said he encountered it in Hong Kong or Shanghai, but it sounded brilliant. You apparently go through security on the train itself, so your travel-to-the-airport time (which you’d have no matter what) doubles as your check-your-bags and go-through-security time.

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      • Cory says:

        When I was stationed in Northern Germany, it was similar with Bremen and Hamburg. Bremen had a small non airline airport, despite it being the size of Indiapolis(mid size city) but Hamburg(size of Detroit) had the large international airport and was only a 1 1/2 hour train trip away. Basically if you were only traveling to Berlin/Frankfurt you would take the train from Northern Germany due to be only 4-6 hour trips, But if going to Munich you would fly.(due to it being 14+ hours by train.

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  9. D says:

    It is shocking to me that a “transportation scholar” would address this question in the language of a politician. Mr. Morris’ Joe Biden quip is as dismissive as it is filled with straw. Two things:

    1) The national discussion about rail will continue to be meaningless until it fully acknowledges the role of government in subsidizing automobile travel. Interstate highways are free; Corn is subsidized; Oil is subsidized, subject to extreme price volatility, and our dependence on it influences our foreign policy.

    2) It makes little sense to speak of rail “profitability” (as defined by a mere revenue-cost comparison) as long as the Federal and State Governments, to an extent, are merely determining what side of the scale to put their fingers on: subsidize roads or subsidize rail.

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  10. sean samis says:

    Better question: why should Amtrak be “profitable”? Are freeways “profitable”?

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  11. Ulysses says:

    Who the hell cares? It doesn’t need to profit. Just get people across the country for cheap and encourage safe travel and fewer emissions.

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  12. James says:

    How does Switzerland manage to run a convenient, popular, and apparently profitable passenger rail network?

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    • Mike B says:

      Train operating companies don’t own the infrastructure so they only need to cover their variable costs, which because of high fuel costs and dense population patterns, is not that hard. The state owns the infrastructure so the really expensive maintenance and capitol projects are backstopped with public funds. Even if the TOC payments are enough to cover the infrastructure costs, rail service is being aided through high government road use and fuel taxes.

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  13. cackacka says:

    When you live in a mid-sized city on the east coast and have business meetings in the financial capital of the world which is 10 hours away by car, or (nominally) 1.5 hours by plane, or 12 hours by way of the current Amtrak infrastructure (vs ~5 hours if we had a 2nd-world European-style train system) the economic subsidy arguments that the first essayist has holds no water…

    … particularly as, out of the last 10 times I’ve flown to the Big Apple, each time my flights have been delayed by >6 hours. Each time. Or rather, they’ve been delayed >6 hours OR CANCELLED. There are no mountains between here and there. It’s not so far as to merit going into the ionosphere. There are many thousands of folks south of DC who would like to be able to reliably interface with colleagues/customers without being subjected to I395 or the ramifications of a thunderstorm over Dallas or Denver or Chicago.

    The people who rail against rail are the ones that don’t have to be somewhere for a living.

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    • James says:

      Err… You have heard of this thing called the internet, haven’t you? They tell me you can even do voice and video conferencing on it nowadays. There are reasons to travel, but business meetings shouldn’t be one of them.

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      • cackalacka says:

        Well done with the snark.

        One can rely on video conferencing and VOIP, and one efficiently manage folks across several timezones, countries, and continents using these tools. I do.

        That said, you’ll discover later in life, James, that no technology can replace face to face interaction. Tools that help facilitate a MMORPG or 1st person shooters can help, but are limited in their efficacy.

        My point stands, that relying on a decayed transportation infrastructure is a very effective way to cripple innovation and development in the country.

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      • James says:

        Funny, I thought – having done my first computer programming on punched cards – that I could qualify as “later in life” :-)

        Perhaps you’ll discover, later in life, that most of that travel for “face to face interaction” is really down to sheer ego. And indeed, corporate status is measured by the cost of your travel, from lowly peons in economy class to the folks on the corporate jet.

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  14. Patrick says:

    “Railways offer the potential for uncongested service, are ecologically responsible, and are beneficial to the central cities they serve; the same cannot be said of rival automobile and aviation systems, which are plagued by delays…”

    During college (around 2000) I would travel by Amtrak from South Bend, IN, to Rochester, NY. Amtrak was horrible about being on time–frequently, multiple times throughout the trip, the passenger rail would have to wait while freight trains came through. It is likely only selected corridors (such as the northeast) where passenger rails take precedence over freight.

    And even if there weren’t as many delays with Amtrak, services are so infrequent that they are rarely worth it. If I want to return to Rochester, NY, from Boston, MA, a 6 hour 45 minute drive, there are two trains offered. One takes 11 hours, the other almost 17 hours.

    Yes, there are subsidies to roads. It’s because people actually USE them that make those subsidies worthwhile.

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    • Mike B says:

      Things have gotten a lot better since 2000 on that route. At that time the former Conrail Chicago Line had been split between two new companies as the result of a merger and freight traffic patterns were disrupted for years causing delays and congestion which the Lake Shore Limited would be subjected to.

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      • Patrick says:

        Amtrak still lists the Lake Shore Limited line as being only 54.1% on time. Other better traveled routes, like the Northeast corridor, have better on-time values. At least one other route is under 50% on time.

        I still think trains have a long way to go, in terms of number of trains offered per day, being on-time, and cost.

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  15. Melvyn Reichel says:

    Both Airlines and Buses are heavily subsidized. Building, running and maintaining airports are costly. Could the airlines survive if they had to pay for airports? I think not.

    I also believe that trains are comfortable for medium distances and they can cut down on air travel in certain corridors.

    Finally, if railroads took advantage of their ability to carry large volumes of people; if service levels were increased. They could even become profitable.

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    • Mike B says:

      To be fair most large airports are net revenue generators, but when they need new runways the public is on the hook for the multi-billion dollar capitol costs.

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  16. onempo says:

    I respectfully suggest that Mr. Morris should get out of car-centric southern California more often. He should spend more time here in the northeast and see for himself how important Amtrak and commuter rail is to our transportation system. Traffic in and around L.A. is bad, but the same can be said for highways from Boston, to New York, Philadelphia, and D.C. If our passenger rail system disappeared tomorrow, our highways would become impassable.

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  17. Steve says:

    One item I do not see presented in these descussions is what value to place on having the option to travel by train/bus/auto/plane. If we take the amount of subsidy and divide by the population of the country does the cost end up too high for the average citizen to have that travel choice.

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    • Mike B says:

      The airlines as a whole have often demonstrated an impressive ability to act collusively. Note how service cuts, fare hikes and new fees seem to spread in waves across almost every carrier. Having different transport options available at least puts a slight bit of pressure on them to improve their product.

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  18. Matt says:

    What the “rail as infrastructure” argument misses is that the rails are the infrastructure, not the trains. Freight trains operate on much of the same infrastructure. The problem with Amtrak, much like the Post Office, is that the central planners have decided it must do unprofitable things. Passenger rail will not be successful cross country. Give Amtrak the freedom to become profitable- to layoff most of its staff and close down most of its routes, and it will become profitable.

    Tolls are a terrible way to pay for roads, we should just use gas taxes.

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    • Mike B says:

      Lines optimized for freight trains are significantly different than those optimized for passenger rail or lines optimized for both freight and passenger rail. Freight trains don’t run to schedules and passenger trains need to be able to maneuver around them. Freight traffic also damages the sorts of high tolerance track necessary for speeds over 80mph.

      Like I said before if you check Amtrak’s finances you will see that LD trains cover their variable costs and also are able to efficiently serve several market pairs. Amtrak’s tri-weekly Cardinal between Chicago and New York via Cincinnati takes 6-8 hours longer than other routes end to end, but most people don’t ride it Chicago to New York. Amtrak will sell each coach seat in the Cardinal on average between 2 and 3 times on a single journey as the train runs through about 3 distinct market segments.

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    • Steve says:

      Gas taxes are no longer a fair way to pay for roads. A tire tax would be more balanced to the actual use, wear and tear for our road system. Take a tire, look at the life in miles and the load rating of said tire then come up with an amount needed. Then trucks and cars would be more balanced in regards to the true costs. Also then folks who have electric cars would pay a fair share. The gas consumption in our country would drop as people watched the tire pressure and driving style to prolong the life of those tires. Trucking would pay a true share of the care of the roads raising trucking costs and sending some of freight back to the railroads. In regards to passenger rail I am persuaded that such a tax would have make people take a second look.

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  19. Sbard says:

    Of course Amtrak will never be profitable. The entire reason it exists is that all the major railroads dumped their passenger service because it was unprofitable.

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  20. Griff says:

    Austria is just setting up its first privatised rail service….

    A big marketing point is that it will have smoking cars!

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  21. Justin says:

    The key here is that railroads have to own and maintain their own tracks. That is a huge barrier to entry for any entreprenurial passenger rail operation no present in any other transportation mode (bus, airline, ferries, etc). I think that we desparately need to spin off the railroad operators from the railway owners. Then, the railways themselves could be nationalized (a la Interstate highways) and paid for by a tax, or remain private and collect a use fee (toll) from any of the operators wishing to use their line. Operators would then be free to use whichever routes are most efficient, not just the route they own (or have an operating agreement on). Ideally both the railways and the interstate highways would operate the same way (both nationalized or both privatized) to maintain fair competition. Only then would we be able to maximize efficiency and truly compare “apples to apples” in terms of what modes people will choose.

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  22. bert eisenstein says:

    IMO we’re not thinking simply enough. There are 4 parameters of any endeavor; what, when, how and cost. The more parameters prescribed, the less latitude for the remainder. In this case, the what, when and how of rail service is prescribed by sunk cost, law and regulation so there is no latitude for operating cost and it’s HIGH. As long as so much of the what, when and how of rail service has no latitude, the cost will remain high and require subsidy in order to continue. The equation becomes; does the benefit of rail equal the high current cost and/or does the need overcome the effort required to mitigate resistance to make changes that would lower the operating costs. We are not there yet and may never be.

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  23. Gary says:

    Privitization and minimal regulation are the only hope for profitability. The real question is can the railroads overcome 150 years of their history — private (aided by government) monopoly first, then more government monopoly later — to become efficient businesses. Everything is prisoner to its history to some degree and in the current environment it’s likely the railroads will remain in chains.

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    • Mike B says:

      The freight railroads are already highly efficient and are able to generate consistent profits despite the extreme maintenance and capitol burden imposed by their networks. Since 1980′s the industry has undergone extreme consolidation and productivity improvements.

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  24. Joseph says:

    I hate that we as Americans are obsessed with the idea of “profitability”. Is there no other way we can think? There are a lot of things in life that aren’t profitable, but are important for society as a whole. Maybe Amtrak is one of them. People who prefer to drive cars might not like having their money go towards a service they never use, but how can they not appreciate the fact that trains running between major cities take cars off the roads they do use, leading to less congestion? In the Northeast at least, this is as close to a no-brainer as can possibly exist.

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  25. Cdub says:

    I’m a little surprised they operate at a loss. Every time I’ve taken Amtrak the train has been pretty close to full for most of the trip, and the ratio of workers to passengers doesn’t seem excessive – at least not compared to air travel. I prefer to fly, but I more prefer to skip the TSA hassle whenever possible and take AMTRAK for long trips.

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  26. Eric M. Jones. says:

    Eric Morris writes: “I have a soft spot for the Zeppelin. This graceful ocean liner of the sky is quiet, clean, energy-efficient and—despite vicious Hindenburg-related media aspersions—safe. Whether providing us with spectacular aerial views of our favorite sporting events or bombing London, these delightful dirigibles have brought joy to millions.”

    A transportation scholar should be clear on definitions. Zeppelin is German for dirigible (rigid airship), and they are are not blimps (non-rigid airships). Dirigibles are much faster than blimps, and much more fragile. The history of dirigibles is a nightmare; not just the Hindenburg. The average life of a dirigible could be measured in single-digit years, usually ending in disaster. They were also horrendously expensive to build and operate. A large dirigible cost as much as a B757, and its operating cost was much higher.

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  27. James A. says:

    Mr. Morris writes, “Rail backers make a big deal about how much road and airport congestion their pet mode is relieving. But traffic congestion, while a big problem inside cities, is rarely an issue on highways between them.”

    Assuming for the moment that this point were true (which I do not concede), I would like to point out that a trip by car between two cities generally involves driving within both of them. Or would Mr. Morris suggest that a trip from Washington to New York would not be affected by traffic congestion in either city?

    Further, he writes, “As far as airport congestion goes, in my experience I have never been troubled by a shortage of suitable flights.”

    This quote suggests a fundamental lack of understanding of the term “congestion”. Congestion is a condition characterized by a decrease in performance due to infrastructure being utilized beyond its functional capacity. It has nothing to do with the availability of vehicle trips (or lack thereof) or those vehicles’ capacity.

    That a supposed “transportation scholar” would make statements as wildly ignorant of fundamental transportation principles such as these does not speak well of his credentials or those of the institution he represents. And I say that as a transportation professional with an M.S. in transportation systems engineering.

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  28. Enter your name... says:

    One stray thought I have after reading all the comments:

    Does anyone else remember how relieved we were on 9/12/2001 to discover that America still had a passenger rail service? With air travel completely shut down, many thousands of stranded travelers got home on Amtrak.

    In addition to its practical value for shorter trips and for a few people who cannot fly at all for medical or legal reasons, keeping Amtrak around is a bit like making a backup of your computer hard drive. It’s wise to have an alternative in case your normal plan fails.

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    • uthor says:

      Seems to me that having a completely second transportation system that almost no one uses in general is a bit overkill for a once in a, what, century? two?, scenario. Like having a second, always up to date, just as expensive but not as good computer in your closet in case your first one crashes instead of an inexpensive backup solution.

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      • James says:

        So maybe you should make that second system better? (Just as I have two systems: one notebook optimized for low power consumption & portability, and a second with a couple of GPUs optimized for number crunching.)

        The point here is that a lot of people in fact DO use rail, and far more people would use it if there were more routes & better service. I’ll almost certainly never take a commercial flight again (at least not until the TSA nonsense is abolished); as others have pointed out, I’m scarcely unique. The trains that do run generally attract passengers.

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  29. James Harris says:

    All I can say as a British citizen is whatever you do don’t do what the Brits did. Our privatized railways became a basketcase for a decade and despite current record ridership still currently display a huge variation in quality and frequency of service, with trains running half-empty at expensive prices being considered better than full trains on the cheap. Some things are best run for profit, and some for the public good, and for me railways belong in the second category. The Amtrak substidy is measly, compared to for example the US’ 700 billion dollar defense budget, and for me represents a good and growing return. I currently live in Germany where thousands U.S. troops are still stationed. If you bring those troops home, that might free up a little money to afford such necessities as a decent train network.

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  30. Ronald says:

    The car-driving oil roughneck in Texas may not be happy about paying for the rail I use.

    But I and the other million or so northeasterners who DON’T drive aren’t too happy about paying for the highways he uses. If all highways become toll roads and Congress ends highway subsidies, so that road users bear the burden of road use, then people might see rail as more of a reasonable substitute for their travel.

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    • Garl Boyd Latham says:

      Ronald,

      Texas has been a federal tax “donor state” far longer than any of us have been alive.

      Still, I’m in complete agreement with the last sentence of your post.

      Garl, a Texan who loathes driving and has never once worked as a roughneck!

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  31. Liz B says:

    Puentes noted the environmental public benefits of moving travelers from cars to trains, but I’d also like to see more discussion of passengers for whom driving or flying is not a good option.

    Car ownership and use is expensive, and will only become more so as fuel prices keep rising. Many people don’t own cars at all, and intercity bus service isn’t always available for them. (Greyhound cut its service substantially in the mid-2000s, and the recent growth of inter-city bus travel seems to be mainly between large cities.) Flying can be expensive, especially for those who have to travel long distances to airports that are inconveniently located and/or poorly served by public transportation — and dragging a suitcase onto multiple bus or train lines isn’t feasible for everyone.

    Rental cars are an option for some people who don’t own cars (my non-car-owning household loves Zipcar for weekend trips out of the city), but not everyone can drive a car safely. Those who have slow reaction times or poor vision or who are impaired by alcohol, fatigue, or distractions represent a danger to themselves and others when they get behind the wheel.

    To some extent, rail and intercity bus are interchangeable for medium-distance trips, although rail has the benefit of neither influencing nor suffering from car-traffic congestion.
    In order for society’s poorest and least physically capable members to travel outside of the cities and towns where they live (a reasonable requirement for a developed country), a strong network of intercity bus and/or rail is essential.

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  32. uthor says:

    As much as I would like to, I can’t justify using the train to go from Peoria to Chicago. For what takes 5 hours and 3/4 a tank of gas (round trip), I’d have to take a bus into the city center of Peoria, another bus to Blomington (an hour away), a train into Chicago (1.5 hours), local transit to where I want to go (about an hour), and reverse to get back. 7 hours, two buses, two trains, and no transport or freedom to be on my own schedule for more money than the 3 hours and 12 gallons of fuel a car costs me.

    I’d love it if there were trains that followed all the major interstates, especially away from major cities. Peoria’s a pretty big town, but there’s no train through the city and no trains, as far as I know, that run east to west around here. If there was one traveling along I-74 that I could hop on, it’d be way more convinient.

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  33. Lou Thompson says:

    The articles are curiously unaware of what Amtrak actually is and why it is that way. Amtrak was actually created because the private freight railroads, who had been required by the ICC to carry passengers at a loss, could no longer carry the financial burden. The idea that Amtrak would ever be profitable was part of a political narrative at the time that was about as credible as the current narrative that we can solve our deficit problems without raising taxes. In fact, shifting the burden of passenger losses to the public sector, where it should be, played a major role (subsequent deregulation was more important) in recovery of the profitable and efficient freight railroads that the country enjoys. In other words, Amtrak was definitely a success if you understand the actual objective. The subsidiary objective — saving passenger service — not so much.

    It is misleading to talk about “Amtrak” as an entity: instead, Amtrak is actually a grouping of three, quite different functions — the long haul trains, the short haul trains and the Northeast Corridor.

    The long haul trains do not perform much of a transportation function: they are instead an option that Congress has demanded that Amtrak perform. They are, incidentally, not infrastructure as they only involve Amtrak as a tenant on the lines of the private freight railroads. All of the long haul trains lose money (revenue-operating costs) and many do not even cover their labor costs from revenues. Of course they could be operated by the private sector as “negative” concessions (maybe some could survive as tourist cruisers).

    The short haul trains either have (or may have) a real transportation role into and out of congested urban areas, but they are also primarily local rather than national in scope. It really makes no more sense to have a single, national company operating them than it would to have a single, national operator combining BART, CTA, MTA and MBTA. Congress and the DOT are increasingly and correctly forcing the states to take a larger role in planning and financing these services and the states (equally correctly) are asking for a larger role in control over operations, even extending to concessioning. In almost all the short haul routes, Amtrak is a tenant on lines operated and maintained by others. Like the long hauls, the short hauls require operating support (some more than others).

    The Northeast Corridor is quite different, partly because of its clear purpose as an important transportation option in the Northeastern megalopolis and partly because Amtrak is not a tenant, but owns the infrastructure for most of the way from DC to Boston. There is only limited operational and service interaction among the three components of the company called “Amtrak.” Amtrak’s Acela covers its operating costs with a significant margin and the regional trains do not fall far short. In addition, the NEC tracks carry a large number of commuter trains for which the access charges are probably below marginal costs and freight trains with access charges that are probably above marginal cost. In short, there is a good argument to be made for developing the NEC, but with a larger regional role in planning and perhaps financing although the Federal Government actually owns the properties that Amtrak manages.

    The real problem with Amtrak, as with many current transportation programs, is that it is actually a mix of public and private benefits and costs. In Amtrak’s case, we already know that the private benefits do not cover the private costs: we learned that well before 1970 and have only continued to prove it since. In the U.S. unlike Europe, we are not good at publicly identifying and reliably paying for public benefits (we prefer to force the private sector to pay if we can or, increasingly, we seem to prefer not to pay for them at all). The private sector will operate and pay for freight services so long as we don’t mis-regulate the industry (ever a temptation), but the private sector will not, and should not be asked to provide rail passenger services unless the public pays them to do so.

    Can the private sector provide public services effectively? Of course they can if the terms of the public/private partnership are clear and balanced. The UK experience is not an unalloyed success; but, then, neither was the predecessor British Railways (BR). Yes, costs are up in the UK, but BR had been under-financed for years and the piper had to be paid. In addition, one reason why public investment is up is that traffic began growing immediately after franchising and traffic levels are well above the historical high at the end of WWII. UK rail passenger traffic has also grown faster after franchising than any other railway in Europe. Other EU governments are experimenting with franchising with enough success that re-nationalization of operations (as opposed to infrastructure) is not on the table anywhere.

    Franchising (or concessioning) is not simple and there have been a number of well documented problems. Then again, compared to what?

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  34. Garbanzo says:

    The comment about labor dragging down Amtrak is spot on. An example that was uncovered in a major newspaper a few years ago is Amtrak loses money every time a train runs with a canteen car. Not because of the cost of the food, but because the union demands the canteen attendant make $60K+ per year, plus benefits, and adhere to outdated work rules. Just look at the hubbub that Long Island Railroad has been facing regarding its frontline employees regularly exceeding $200K per year due to wacky union work rules, and this gives you an idea of what Amtrak faces.

    Would be interesting to perform a labor analysis of Amtrak versus a Japanese rail company to better understand staffing and compensation levels, as well as capital investment and state subsidy.

    Public unions continue to pick the pockets of taxpayers, be they cops, firefighters or other civil servants. Collective bargaining rights need to be seriously restricted to bring more symmetry to the power balance here.

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  35. Sesha Swami says:

    First question that we should ask ourslevesis that do we have the (political) will to make this happen. How reliable is the network and what are the options for getting from Boston, MA to say Buffalo, NY on Amtrak ?

    Instead of making Public transit the ‘Last Resort’ it should be made the first option, which is a cultural change that one needs to seed and propagate. Considering where we are WRT public transit, leave alone Amtrak, it would take atleast a decade to send that message deeply within the communities, which would also give us a time to scale up the Public Transit infrastructure to where it should be.

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  36. G3 says:

    Amtrak will always be available to point out as a failure to fans and lobbyists of other transportation modes as long as the terms of comparison are allowed to be inconsistent among them. Cars and busses don’t have to pay for roadway capital and maintenance, or for state troopers and other traffic management systems. Airlines don’t have to pay for airports and air traffic control systems. Only rail is burdened with these extraneous charges as somehow intrisic to its operation. If Amtrack only needed to pay for its locomotives, passenger cars, engineers and conductors, it could easily be seen to be as profitable as its competition.

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  37. Susan Fischer says:

    None of these experts have mentioned two of the most important roadblocks to AMTRAK’s move to “privatization”: AMTRAK was created in the 1960′s because the private railroads were desperate to unload the unprofitable passenger services that they already had. The railroad companies were only interested in moving freight as it required much less capitalization and “Freight doesn’t complain”. What companies are going to ignore the obvious and invest in a business that has historically lost money? The second barrier to profitability is that the majority of railroad tracks that AMTRAK trains run on are still owned (and leased to AMTRAK) by the very companies that let go of their responsibility to offer passenger service. These railroad companies are the ones making money from the subsidies that the government pays to have AMTRAK use their tracks.

    A third issue not addressed by the experts is that the cost of airfare between mid-sized cities and towns in this country is very high due to low demand. Try flying from the San Francisco Bay Area to Santa Barbara. Not a problem if you are well-to-do, but a real burden if you are a student at UCSB. In many parts of this country, airports are a two hour drive away (if not more). So if you are not living in the big metro areas in the US (most with some kind of mass transit), you have only one option for travel wiithout the train, and that’s to drive. It would be a shame to allow the illusion of profitability to kill some of the infrastructure needed for easy and cheap cross-country travel.

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  38. Jim Loewen says:

    First, Amtrak makes use of otherwise underutilized freight rail lines. Good synergy. In the future GPS, etc., can help the government monitor the safety and cooperate in improving these rail lines.
    Second, Amtrak makes possible ancillary benefits, such as European tourists (who spend $), places dependent on Amtrak for important revenue (Greenbrier, Glacier Park.
    Third, no one (to my knowledge) who argues against Amtrak’s subsidy of $1-1.6 billion has uttered a peep about the $2-3 billion we spend subsidizing operation and safety at scores of airports that support 0-4 commercial flights/day. How ’bout some consistency?

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  39. John W says:

    According to Eric Morris, “In terms of passenger transport, trains are a 19th century technology that we are attempting to apply to a 21st century problem.”

    Which century’s technology, pray tell, does he think the automobile and the bus are based on? (Hint: it’s not the 20th century). It’s a tiresome soundbite from the same sort of person who feels it necessary to use the word choo-choo in any discussion about passenger rail feasibility.

    One thing missing from the discussion about profitability is the impact of proper high-speed rail (which isn’t 19th-century tech, btw). If city pairs such as Barcelona-Madrid, London-Paris and to an extent New York-Washington are anything to go by, the CAHSR will capture the majority of airline passengers between SF and LA. From what I have read, the projections are for it to easily be operationally profitable, which, if Amtrak is chosen as the operator, could help push it into an overall profitable position nationally.

    Another, touched on in the comments, concerns the political. Will it be possible (or desirable, even) for Amtrak to divest itself of unprofitable cross-country routes? How many Senate votes are dependent on unprofitable (portions of) routes through the least-populated states?

    And just because I’m in that sort of mood: it’s capital expenditures, not capitol. And loose rhymes with moose (you lose money, but you let loose the flying monkeys).

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  40. Bill says:

    What tripe. More foolishness without regard to the oil production numbers or the fact the each year now oil sells for record average high costs, and the fact the most of the defense department budget of a trillion or so is spent securing oil for the empire. You “experts” should retire to a farm and learn how to grow a bit of your own food. Preferably near a rail road, so you’ll be able to travel and do a little commerce in a decade or so.

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  41. Ben from Australia says:

    A good article, with compelling points from most sides. There is no doubt that the European rail system is marvellous but it is dangerous to assume the US will have an equally good system simply by following their lead. The USA and Europe have a somewhat comparable land mass, yet Europe has a rough population count of 731 million, compared to the 307 million Americans. Stephen Smith even seems to compare USA to Switzerland! The European rail infrastructure is already mature, whereas the American system needs development and the government just does not have the political will to spend that much money. Instead they are just keeping rail afloat until better economic times come. Then this debate will begin once again…

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  42. Tom says:

    Why all this pressure on Amtrak to be profitable? How many airlines have gone bankrupt? Are roads profitable? When the government builds roads, does it make money? I don’t understand why Amtrak is singles out as having to be profitable, when so many government initiatives are not.

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  43. Steve says:

    Preserve corridors for passenger rail use when they will be profitable. Use intercity bus service for now.

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  44. Mark says:

    France’s TGV is a resounding success. Huge government subsidies. It wasn’t profitable for the first years but now it is, especially Paris-Lyon. One cannot underestimate the fact that getting to and from a train station in a major city is much faster than getting to the airport.

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  45. Ray Ginnever says:

    PUBLIC GOOD. PUBLIC GOOD. PUBLIC GOOD. I read all of the above articles and not once did i see a reference to public good. Do people not understand that for modern societies to function we sometimes simply have to invest in public good infrastructure. Public good arises when the economic business model available for a service is not suited to the private market, or private entities cannot capture enough of the benefits that a service provides and therefore is not viable privately. That doesn’t mean that the service should not be provided. It means if we want the service, it needs to be provided through the purchase of public good.

    Rail is precisely this form of service. Imagine if Amtrak stopped today. What a massive disruption it would be if all of those millions of users switched on one day to alternative uses of transport, mainly private vehicles and some limited air travel. We would see massive gridlock everywhere, and hundreds of millions of hours of lost productivity. Is that what we want. No. We need basic infrastructure like Amtrak to avoid this sort of chaos.

    When we travel by car, we count our gas costs, and occasionally our operating costs when they are incurred, so we think it is cheap. We pay for the billions to build our highways and to maintain them through our income taxes, gas taxes and vehicle licencing fees, so we don’t perceive those as direct costs of vehicular transport, and so we moan about paying extra in subsidies for rail and Amtrak. However, our massive debt costs incurred to build highways and the gridlock we avoid by having Amtrak are costs that never seem to enter the comparative equation.

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  46. Billson says:

    There are MANY key issues that are greatly interfering with Amtrak that could easily be removed:

    1) The FRA is applying unfeasible regulation to Amtrak, and does not do this to class 1 freight railroads as they can compete, are privatized, and the best, can lobby as hard as big oil. Union Pacific is the largest user of diesel fuel in the world! The FRA also has striking limitations for Amtrak, as a feasible intercity rail system would greatly decrease automobile oil sales, and almost every govt. agency can be lobbied by oil. The EPA also has legitimate concerns about rail service, by 1976 standards. With MBTA, the EPA halted an almost urgent South Coast Rail project as MBTA would be crossing Buttermilk Bay, which posed concerns for water quality. This was an issue mostly relevant in the 1970′s, and had nothing to do with climate change, population problems, or any other issues the MBTA extension would be addressing.

    2) When I ride Amtrak I commonly see the misconception that Amtrak is in control of their right-of-way. The delays, as mentioned before, are mainly due to freight traffic. This is only because deregulated freight railroads are able to knock around Amtrak for…fun. That’s right. There’s no financial gain in doing it, having an Amtrak train on the line will not considerably slow the delivery of commodities. It’s merely an assertion of who’s in charge, and with regulating corps. like CSX, BNSF, and especially UP, we could in the interim in force on-time deliverance of Amtrak trains by giving them priority. This would speed up operations a WHOLE lot.

    3) Amtrak may be given subsidies, but of which can not pay for train maintenance. In pockets around the country, the host rails will supply MOW to Amtrak. This is risky as much could go wrong. Amtrak, however, is responsible for the maintenance of stations, trainsets, locomotives, and rolling stock. This is an apparent area of disconnect when onboard. Superliner cars from as early as 1989 have misaligned trucks, inoperable plumbing, and frequent electric issues. This attracts more flack from FRA. Amtrak can not be profitable as the minimal subsidies received can not equate to cover maintenance costs. If fares are collected by amtrak itself, they are certainly not covering these apparent issues. That’s the one question I have: Where do the fares go? Although the maintenance costs are unusually high, one would think that 18+ years of steadily increasing ridership would just be starting to cover these costs.

    One thing that is greatly uncertain about privatizing Amtrak is that it will be of course up for bid, and there is the blatant opportunity for an oil corp. to purchase it. We’ve seen it in the 1950′s when texaco and GM bought the San Francisco trolley system.

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  47. Ross says:

    What routinely gets left out of the debate of AMTRAK’s federal subsidy is that it is in reality a pass-through to the four mainline freight rail companies, in the form of track leases. Through AMTRAK, taxpayers are subsidizing the price of all the consumer goods, bulk commodities and industrial equipment shipped by freight rail. It is reasonable to debate whether AMTRAK should be competing with airlines on long-haul routes, how best to serve rural areas, whether the whole thing should be privatized, etc. But the bottom line is that if AMTRAK’s subsidy disappeared tonight, the price of every wide-screen TV, box of laundry detergent, tuna fish can and Twinkie would go up tomorrow.

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  48. Calvin Brown says:

    I believe that Amtrak can be profitable in many ways. Amtrak is one of the first form of transportation that individuals love because their able to take on many luggage as they want versus flying on the airplane you have to pay for a bag. As a airline worker I hear customers complain about the cost of plane tickets and having to pay for luggage The statement that most customers make is where is the nearest amtrak station and if I was on amtrak my luggage would be free. If amtrak had the option of making less stops and having a quicker route to destinations then I believe that more customers would travel amtrak versus flying on an airplane.

    Profits come in when you give customers different options as far as meals, drinks, and other neccessities because it makes them welcome and wanting to travel amtrak versus other transportation options. Amtrak definitely has room for profits if the marketing is done consistently based on the reactions of its other transportation competitors.

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  49. Aaron Berkovich says:

    These articles look more like a propaganda generously paid by highway and air lobby. It is virtually based on the dogma that Americans are not interested in passenger rail, and that the minuscule role Amtrak plays in overall intercity travel marked is solely due to the people’s lack of interest. This is similar to a story about a consultant handed a task to determine whether an extra stop for a particular commuter train is needed. The consultant came back with a finding that the extra stop is not needed because “nobody was waiting at the station when that particular train was bypassing it”. An obvious fallacy is your statement that Amtrak loses $1 billion in spite of the subsidies. In other words, according to this statement, the subsidies Amtrak gets is not enough to cover its losses. The obvious question is: how come Amtrak hasn’t go bankrupt years ago? Are there some hidden secret funds its getting on the top of the “official” subsidies? I don’t think so. More likely, this whole premise is purposely constructed by those who are greatly disturbed by seeing passenger trains still running across the United States. Another evidence of this bias is the admission that it might be true that other modes are more heavily subsidized but that even if it’s true, this argument is not strong enough. Let me tell you something: it is. Unless, of course, you are hired by the petroleum lobby. And the great distress caused by the minuscule $1.6 billion Amtrak gets annually is just another example of this bias. Somehow Americans are expected to be content with heavily subsidized air and highway (including bus) travel because the wealthiest country in the world supposedly can’t afford the mode that other developed countries subsidize much more generously.

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  50. Aaron Berkovich says:

    “To what extent America outside of the Northeast gets subsidies is a political question, but it should be strictly segregated from the viable Northeast Corridor.”

    Northeast Corridor may be operationally profitable but it still requires major capital investments, just like highways and airports do. Expecting the legislators from faraway areas to support these investments is a far cry, unless their states or districts somehow benefit from those investments. With a single Amtrak system, they do. The operating profit of the Northeast Corridor is helpful for cross-subsidizing the rest of the network. If the Northeast Corridor was to be split off, other routes would cost more to the federal government, while the capital money for the Corridor itself would be more difficult to secure.

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