Privatization of Dining Car Service may be the answer

[dlagrua]

IMO, Amtrak food service will continue to be under attack by those in congress that feel that the costs are excessively high. As a result, this year Joseph Boardman Amtrak CEO, promised to make train food service profitable. This is not only impossible to do; it is something that has never been done in the history of passenger rail. In view of this, we may be faced with either a continuing decline in food service or possibly no food service within two years.

It may be time to privatize the dining cars. Amtrak can supply the facilities and a catering or restaurant service can be brought in to take care of food service. The service would still need to be subsidized to a degree but it may be a way to lower costs and maintain dining car service on the LD trains.

Back in the day when the Santa Fe railroad ran the California Zephyr; to keep costs in line they contracted out the dining car service to the Fred Harvey company. The menu choices were excellent and in the case of the first class Turquoise room the food was gourmet quality. Point is that it has been done before and can be done again.

If privatization were to happen it would be an extra expense for the passenger but at least we would have the opportunity to get a good sit down meal and possibly Amtrak would adjust the fares a bit. Some may object to this proposal but this may be the only way that the dining car can be saved.

What say you?

 

[John Bobinyec]

I think it's all accounting flim-flammery. Regardless of who furnishes the food service, Amtrak will always have a food related expense which it cannot directly recover from the food service prices. No outside company is going to enter into a contract that is guaranteed to lose them money. So, the cost of the food service car will have to be paid for by Amtrak - and where will they get the money? As long as there is a negative cash-flow to Amtrak due to having a food service car, the service will be a Congressional target.

Even a company which wants to set up a modern day Harvey House will have the same problem in that they won't want to "eat" the cost of the facility that they're using. And - "off-board" services like that will delay the trains.

jb

 

[xyzzy]

Think about prices in the dining car before and after privatization. There might be reductions in operating cost if the new operator is non-union (quite controversial), and there might be reductions in supply costs if the new operator has better buying power than Amtrak (doubtful). On the other hand, the new operator will insist on making a profit. The likely outcome is that prices in the dining cars will have to rise. They are already so high that the dining cars tend to attract only "cruise line" passengers and railfans.

In my mind the dining car question is merely a stalking horse for why we have LD trains. If LD trains are about essential transportation for people in rural areas and people who will not or cannot use another mode of transportation, then sleepers and diners can be dropped and the question morphs into whether we should be running daytime-only trains to serve those folks. If LD trains exist mainly to serve as cruise lines and to satisfy rail fans -- in other words, to provide joy rides -- then let the prices for sleepers and diners go up. We shall see if those market segments are willing to pay what it takes to give them what they want.

The crap will hit the fan on LD trains when the time comes to replace the Superliners and Amfleet II's. That day isn't tomorrow but it's coming.

 

[neroden]

I wish to emphasize that xyzzy's assumptions are wrong. Over half the dining car patronage on the Lake Shore Limited is from coach. Dining cars remain vital whether or not there are sleeping cars. Basically, if the train is running too many hours, over multiple meal periods, a large number of people start to demand a proper sit-down meal.

The alternative to dining cars is dinner stops. Which Amtrak has practically reinstituted at Albany, NY, already, and it stinks.

 

[Ryan]

What will the Magic Privatization Fairy bring to the table that Amtrak is unable to do themselves?

 

[xyzzy]

To the contrary, in your zeal you misinterpreted my comments. I didn't say there were no coach patrons of dining cars. The question is, what types of coach passengers eat in dining cars. This is market segmentation 101. It certainly is false to say that cruise line and railfan passengers never travel in coach. Obviously they do. (I have myself.) That said, dining cars would not exist today without cruise line and railfan passengers, whether they sit in coach or in sleepers. The question is whether those dining cars would survive under a privatized model in which prices go up 25-50% (my guess). At some point the price elasticity of demand becomes a factor even for the cruise line patrons and railfans.

All of this is irrelevant to the passenger with less money in his/her pocket who rides LD trains. That market segment isn't in the dining cars anyway. Nor is it likely relevant to the guy who travels from Minot to Grand Forks.

As they say in the country, "it's the stuck pig that squeals". Any step on the slippery slope toward eliminating dining cars stirs up irate opposition among cruise line and railfan passengers. But do we, or should we, run LD trains primarily for them? I think not.

 

[Yumacool]

The privatization of food services on Amtrak is an interesting question and I am sure that Amtrak's unionized workforce would be opposed to it, however, I feel we need to take a hard look at it. I believe we need to consider both dining car and the cafe services on LD trains. The cafe can provide a different and, hopefully, improved menu with innovative "specials" throughout the trip that will encourage buying. Amtrak would own and operate the dining car as part of the train, but the private company would provide meals and service. Yes, meal prices possibly will rise, but there will, hopefully, be more innovation and local differences throughout the Amtrak system. Definitely not a "one menu serves all, in all cases" mentality, as exists now. The dining car experience is one of the highlights of train travel that must be preserved, so we need to look at various options. To say, as Boardman did, that food services will pay for themselves in two years is both naive and dishonest. It's simply not going to happen, as any rational rail observer would say.. Amtrak will always have to accept some amount of loss and be able to chalk it up toward attracting passengers. A sizeable group simply won't ride if food services are decimated.

 

[PaulM]

Get off the cruise line kick.

The cruise line mentality's solution to the problem would be to force the LD trains to be even more unreliable and impose and even slower schedules on them. Then truly only the mythical cruise line passenger would ride them.

Overnight train Midwest to Denver is the only civilized way to travel. Or NE to Chi, if only it were a little faster and more reliable.

 

[Anderson]

To the contrary, in your zeal you misinterpreted my comments. I didn't say there were no coach patrons of dining cars. The question is, what types of coach passengers eat in dining cars. This is market segmentation 101. It certainly is false to say that cruise line and railfan passengers never travel in coach. Obviously they do. (I have myself.) That said, dining cars would not exist today without cruise line and railfan passengers, whether they sit in coach or in sleepers. The question is whether those dining cars would survive under a privatized model in which prices go up 25-50% (my guess). At some point the price elasticity of demand becomes a factor even for the cruise line patrons and railfans.

All of this is irrelevant to the passenger with less money in his/her pocket who rides LD trains. That market segment isn't in the dining cars anyway. Nor is it likely relevant to the guy who travels from Minot to Grand Forks.

As they say in the country, "it's the stuck pig that squeals". Any step on the slippery slope toward eliminating dining cars stirs up irate opposition among cruise line and railfan passengers. But do we, or should we, run LD trains primarily for them? I think not.

Ok, I have to disagree with your assertions. Yes, I know that I'm an outlier here in my dedication to grabbing dinner between WAS and RVR, but I think you have to remember that:

(1) There are a lot of people who do take long-distance/overnight trips for non-"cruise" reasons (the Florida trains come to mind), be it in coach or the sleepers.

(2) The longer a trip is, the more likely someone is to seriously want a meal or two per day that isn't just what you get in the cafe. I'd note that the general rule seems to be that, provided that passengers know what options are available on the train (and space-permitting), somewhere around 15-30% of coach pax onboard will choose to eat in the diner. This holds on both the Chief and the LSL per their respective PIPs. A lot of folks don't end up in the diner because either space isn't available or the OBS does a lousy job of mentioning it/people don't realize that there are two food cars on the train and don't go past the cafe.

(3) I'm going to assert that if no diner is available you'll still have plenty of passengers who do long-distance trips...once. With only a cafe (and presumably no serious improvements in the menu of the cafe) you're likely to, I strongly suspect, lose more in trips that don't happen than you save in the elimination of the dining car.

(4) Finally, even if ridership holds up...there's still an issue of space to stock the cafe properly. I can not see a cafe car alone being able to store the food needed for a run of the Chief or Builder.

Amtrak has generally gotten it stuck in their minds that the diners are for sleeper pax only and behaved accordingly...even when their own data indicates otherwise.

 

[MikefromCrete]

I hate to be "that guy," but the Santa Fe and Fred Harvey never operated the California Zephyr. That was the Burlington, Rio Grande and Western Pacific railroads. Santa Fe's famous trains included the Super Chief, Chief, Texas Chief, San Francisco Chief and the Grand Canyon. Putting aside the nit-picking, I would be interested in how Santa Fe and Fred Harvey worked together to provide the food services. As far as I know, the on-board staff were Santa Fe employees. Did Fred Harvey just provide the actual food stuffs and provide oversight on the preparation of the food? I don't believe any other railroad of the classic era had such an arrangement with a land-based restaurant company.

 

[tommylicious]

The Amtrak cushy staff costs are dragging down the food and beverage line. Interesting notion. Flush out the overpriced, unaccountable union staff and replace with contractors who are held accountable.

 

[Ryan]

Yeah, screw those guys that make a living wage. Let's get us some people in that we can pay crap wages and treat poorly. That'll fix everything!!!

 

[FormerOBS]

Math.

Assuming the contractor provides the same quality as Amtrak provides:

It costs X to provided food service.

It costs Y to pay employees to do the job. Pay them less, and you will incur extra costs related to high turnover and training of new-hires, many of whom will leave before the cost of training them has been amortized.

It costs Z to provide a margin of profit to the contractor.

X plus Y plus Z is greater than X plus Y.

Tom

 

[Ryan]

I've said much the same thing over the years. Seems obvious when you put it that way, but some people can't seem to grasp it.

 

[zephyr17]

I am not absolutely sure about this, but I think that Alaska Railroad contracts out their dining car service. Their food and options are pretty good, so if they do I think that would be a good model for Amtrak. The online menu references a company called ESS.

 

[gaspeamtrak]

How true Ryan...Some people don't get it...

 

[Bob Dylan]

As a famous dead guy used to say, "there you go again!"

Bashing of Union workers by the un-informed seems to be spreading and baffles me as to why people do it! ( the old divide and conquer strategy)

As Ryan says, just because someone makes a liveable wage and dares to have benefits such as insurance, vacation and a guaranteed secure retirement ( Railrosd Retirement is in lots better shape than Social Security), its OK to make them a whipping boy for right wing rhetoric!

I'm one of those who thinks that the food service aboard Amtrak Trains is overpriced, of poor quality and is in rapid decline due to bean counter schemes currently coming out of 60 Mass.

We've discussed this many times here on AU and of all the ideas that have been presented, those that seem to offer the best prospects for improvement are going back to the old system of everyone paying for their food and drink and improving the choices and quality of the offerings by better contracting ! ( works on State sponsored trains like the Downeaster and Surliners)

I'm not opposed to contracting out food and drink service as long as the current Amtrak food service employees are allowed to transfer to other OBS posiitions.

Modern ideas such as being able to select food and drink when making reservations, and a system like that used in India as jis says, should be considered and tried in pilot projects.

Moronic ideas like the current one happening on the Star,and the nickel and dime Cuts in the Diners and Sleepers that are coming from the bean counters are not the answer!

Also Mr Boardman ( and his successor) needs to quit making promises ( lying) to the Mica Managers in Congress that are impossible to keep.

Let them eat cake, SP like Automat cars and promises that can't be kept followed smoke and mirror accounting are not the way to go!

It's Time for Joe to go and New, Strong Leadership brought in to 60 Mass!!

 

[Train2104]

I've said much the same thing over the years. Seems obvious when you put it that way, but some people can't seem to grasp it.

I agree when it comes to privatization, unless the contractor already has a system they can tap into to reduce costs on their own (vs Amtrak establishing a parallel system), the profit margin only adds to costs in the long run.

As for pay, its not a cure all. But to deny that personnel costs are part of both the problem and solution is foolish.

 

[John Bobinyec]

How true Ryan...Some people don't get it...

The reason people don't get it is because they're used to the McModel of the world. They go to their neighborhood fast food restaurant and see the high-schoolers working there and they like the prices that those low-wage-earners allow. They then expect the same low prices in a dining car/cafe because that's what they are used to. They don't stop to think that they can't get those same high-schoolers to work on the trains because frankly, their parents expect them to attend school, to be home at a reasonable hour and to get their homework done.

jb

 

[Lonestar648]

There are plenty of business people who travel overnight on one of the LD trains. Myself, I used the CL between CHI-WAS and the LSL CHI-SYR,ALB,BOS so many times I lost track. During these travels I found others who traveled regularly for business on the LD trains. Without a DC I can not see these business folks continuing to travel using AMTRAK. Occasionally, I would run across an Amtrak manager, so I would discuss ways to entice more business travels into using Amtrak. Bottom line was that the powers that be were just not interested in expanding that segment of the market. Increased volume in the DC would increase the revenue thus to a point no additional labor costs, just inventory costs. Breakfast has the greatest margin for profit, but the lowest revenue. Since the DC seems to have more breakfast business than any other meal, why recently is Amtrak cutting the serving hours in the morning. Thought, why not offer a limited Breakfast service into the afternoon in addition to the hour they have now for lunch?

 

[C855B]

Subcontracting meal services only makes me think of airline food, and the well-documented deterioration of quality and service. I simply do not want to go there. Before you know it, the dining car staff will be gone and it will be the conductors pushing a warming cart down the aisle.

Phoney-baloney "cost center" accounting vs. staff costs aside, access to a reasonable sit-down meal service is part of the LD train experience. Paring it down or eliminating it in the name of line-item profitability is a sure-fire way to put us back in our automobile for interstate travel.

Besides, I think this targeting of meal services is all part of the "death by a thousand cuts" strategy that certain politicians are using in ongoing attempts to kill Amtrak.

(Somebody mentioned SP's automats. Yes - same thing... it was a yet another ploy by DJ Russell and then Ben Biaggini to make the passenger feel unwelcome and uncomfortable. And then they could thump deteriorating passenger counts to justify further cuts, and "why are we in this business?" lectures to the regulators. Been there.)

 

[FormerOBS]

I hear stories about overpaid Amtrak employees, and I believe many of them must be office-dwellers at 60 Mass. They are certainly not the OBS people whose income seems to be the target of these ongoing attacks. "Train2104" says "to deny that personnel costs are part of both the problem and solution is foolish." I guess I agree it's part of the problem, simply because it's an unavoidable fact of life. But the implication is that the solution is to pay McDonald's wages. Would you, or any sane person, take a job that keeps you away from home and family for days at a time, that gets you up before the sun every morning and keeps you up till nearly midnight every night, that wears at your hips and knees from the constant need to compensate for the motion of the train, and do it for McDonald's wages? Maybe you'd do it for a summer job, but I guarantee the novelty would quickly wear off.

Paying low, fast-food wages to onboard personnel is an idea that can't be sustained over any significant amount of time. What you gain in cheap wages would be lost in turnover.

Tom

 

[Paulus]

A living wage doesn't necessarily mean paying them as much or more than nurses however.

 

[xyzzy]

I think you also have to look at this in the context of airlines. I've seen people go coast-to-coast on Southwest, six to eight hours in the air on a multi-stop flight, and never eat anything except crackers, peanuts, and what they brought on board. As far as I know, no airline offers free food in economy on any domestic route -- and their food-for-purchase options in economy are less than what Amtrak sells in cafe and lounge cars. Expectations of the traveling public for in-flight or on-board food service have fallen.

I'll make a prediction... 25 years from now, the only overnight passenger trains will be the Auto Train, NY-Chicago, and one Chicago-west coast train. And some of those might be seasonal.

 

[Lonestar648]

Even though many people do not think so, you generally get what you pay for. If you pay minimum wage or near that, then your turn over will be 100% or greater per year thus significantly raising your recruitment and training costs which could far exceed the costs of paying for qualified and responsible workers.