Should Amtrak be privatized?

[Cal]

Brightline built up a railroad between Orlando to Miami. It's not making money on rail but their goal is to make money on real estate next to the rail stations.

And therefore it cannot be compared to Amtrak. I don't think Amtrak can do the same practice as Brightline.

 

[PaTrainFan]

And therefore it cannot be compared to Amtrak. I don't think Amtrak can do the same practice as Brightline.

Well, no, they can't to the degree they need to float the entire company.
They're trying with the limited assets they have in the NE Corridor but that can take them only so far.

They were trying in Chicago but evidently any plans they've drawn up there have evaporated.

 

[rookzie]

There is really no good argument for the taxpayers to subsidize an "experience." The justification for running long distance trains is to provide needed transportation service to rural areas and for people who can't fly or drive. Those wishing the "experience" can ride some of the many "private varnish" operators, although when you look at their prices, you won't complain anymore about the price of Amtrak sleeping cars.

And as a regular rider of the NEC and a one-time rider of the Auto Train, I wouldn't say the passengers are treated like freight. In fact, the NEC is a major part of the overall transportation mix in the northeast, and the Acela and Northeast Regional are my preferred mode of transport if I'm traveling between Washington and Boston. However, even the NEC isn't "profitable" enough to interest private investors of the sort who would actually invest their own money in the enterprise and expect a decent rate of return.

I might be wrong, but I think ScotiaBound's point in the analogy to freight in the NEC, is that the sheer volume of passengers moved back and forth on that corridor including the Regionals, is as if the service to passengers were a "commodity" for lack of better phraseology. Perhaps a better comparison could have been made, but I don't believe the intent was NEC ridership was such that passengers are treated like freight per se. I felt "commodity" was used to suggest an economic good or something useful or valued, as with the provisions of the service itself.

And as far as any privatization of Amtrak is concerned, considering the source of the suggestion, an awful amount of resistance likely would ensue from front's not even yet conceived. As far as running "privatized" along existing rights-of-way is concerned, it's been tough enough between the private carriers and the STB, I don't foresee a situation evolving like the sharing of infrastructure among communications firms.

 

[Harmon Shay]

The degradation of the "Amtrak Experience" began with Anderson and continues under Flynn, a former Delta Air Cargo CEO. That is pertinent because it shows a lack of focus on and vision for a lucrative target market.
Yes, NEC and Auto Train are point A to point B travelers, and like airlines, treated as freight. LD travelers, on the other hand, are largely in it for the experience. The much-maligned Boomer generation now has the time to indulge in such an experience, but given the lack of focus on that aspect are not courted as they should be. It's not only the Boomers, but younger generations as well, as evidenced by all of the YouTubers, that can be reached.
Adopting a cruise ship instead of a freight mentality would be beneficial.
Once upon a time, on Amtrak, the sleeping car attendant would settle you in, ask what time you would like to be awakened, would you prefer tea or coffee and what juice you would care for. They would awaken you in the morning with those and a newspaper from the previous station.
Then there are the operations themselves. I've been tracking the Floridian for the past few weeks preparatory to a trip in late Spring. More times than not it is late departing Chicago due to "late arrival of equipment", "late servicing of equipment". Chicago has sidings full of Amtrak rolling stock.
Amtrak needs a Dagny Taggart type CEO.

The Floridian is another long-distance train with less than a 12-hour turnaround at its end point. It's another reason Amtrak needs to keep an extra set of equipment in Chicago to take care of late Floridians, Lake Shore Limiteds or Cardinals. Whether they have the equipment or not doesn't matter, they still need it and are going to have to arrange it at some point to make things work properly, given Amtrak's constant mechanical problems and increased freight railroad unreliability. Perhaps when the Airos start getting here and we get all the Viewliner sleepers back in service, something can be arranged, that's if Amtrak isn't butchered in the meantime. If Amtrak flatly refuses to do it, then Congress should legislate it. 12-hour minimum turnaround times required on long-distance trains (except Autotrain; that would admittedly take too much equipment.

 

[Tlcooper44]

Brightline built up a railroad between Orlando to Miami. It's not making money on rail but their goal is to make money on real estate next to the rail stations.

Brightline’s goal is to not make any money on tickets?

 

[Devil's Advocate]

Brightline’s goal is to not make any money on tickets?

I think a lot of commenters continue to confuse Brightline with the FEC, which differ in meaningful land ownership by orders of magnitude. Other members probably know more about future plans and expected earnings than I do, but regardless of goals and timelines Brightline lost around $500 million in 2024.

 

[cirdan]

Part of the issue here (and especially with the USPS) is if you want to have a service that covers most or all of the country, you are going to lose money unless you stop serving everyone and just cherry pick the more profitable services. For Amtrak that would basically be the NEC and Auto Train.

Part of the question here is, what do we mean when they speak of privatization. If we're talking about a UK type scheme, with the government handing out contracts and paying subsidies, and the private part just being in the nuts of bolts of marketing and operations, this does not necessarily mean a total decimation of Amtrak. It can on the contrary contribute to stability as it forces the government to commit funds for longer horizons rather than from appropriation to appropriation.

The UK example shows that privatization does not save costs. On the contrary, those have inflated in a most grotesque manner. But it does put an end to the slow erosion of the system as private companies are apparently more efficient at lobbying and at extracting subsidies. Back in the 1980s lines were still being closed down at the rate of several a year. There haven't been any notable line closures for a long time now, and on the contrary, some long closed lines are being rebuilt or have already reopened. The mechanism here being private companies spending government money. And yes, passenger numbers have gone up quite significantly as a result.

Other countries such as Germany have followed suite, and handed over certain services to people like the National Express group or Transdev. I am sure these would also be delighted to make a bid for Amtrak.

So maybe cheerleaders of privatization should be careful about what they are wishing for.

 

[Bostontoallpoints]

Brightline’s goal is to not make any money on tickets?

I don't think it is their stated goal. Their primary goal is to sell real estate near their train stations.

 

[MARC Rider]

I don't think it is their stated goal. Their primary goal is to sell real estate near their train stations.

And once the real estate is sold and the trains aren't making money, or at least enough money to satisfy the desires of the investors, what's going to happen to Brightline? I'm not taking bets, but I think it's even money that it will get dumped back on the public. Either "Brightline by Amtrak" or some sort of other public ownership consistent with the political culture in Florida. Maybe some sort of partnership between SunRail and TriRail.

 

[jis]

I don't think it is their stated goal. Their primary goal is to sell real estate near their train stations.

I would recommend actually reading their business plan instead of just speculating

 

[Bostontoallpoints]

And once the real estate is sold and the trains aren't making money, or at least enough money to satisfy the desires of the investors, what's going to happen to Brightline? I'm not taking bets, but I think it's even money that it will get dumped back on the public. Either "Brightline by Amtrak" or some sort of other public ownership consistent with the political culture in Florida. Maybe some sort of partnership between SunRail and TriRail.

It will be interesting to see what happens. They seem to be able to get funding whether private or public. Right now as stated in their last report the 4 car trainsets are limiting passengers as many of the trains are sold out. They plan increasing the trainsets to 7 cars this year.

 

[cirdan]

And once the real estate is sold and the trains aren't making money, or at least enough money to satisfy the desires of the investors, what's going to happen to Brightline? I'm not taking bets, but I think it's even money that it will get dumped back on the public. Either "Brightline by Amtrak" or some sort of other public ownership consistent with the political culture in Florida. Maybe some sort of partnership between SunRail and TriRail.

I am not sure whether the owners of Brightline are selling off or simply renting out the real estate.

One model is sustainable indefinitely whereas the other is not.

I understand that Japanese Railways make a lot of income from high value rentals around the major stations, and subsidise their trains with this money.

If however Brightline is selling assets and will continue to do do so until its all gone, then I do see some public body taking over Brightline in the long term as clearly it will be too big and too important to abandon.

 

[BlackDiamond]

The UK example shows that privatization does not save costs. On the contrary, those have inflated in a most grotesque manner. But it does put an end to the slow erosion of the system as private companies are apparently more efficient at lobbying and at extracting subsidies. Back in the 1980s lines were still being closed down at the rate of several a year. There haven't been any notable line closures for a long time now, and on the contrary, some long closed lines are being rebuilt or have already reopened. The mechanism here being private companies spending government money. And yes, passenger numbers have gone up quite significantly as a result.

I'm not sure the reopening of lines wouldn't have happened anyway, as a result of increased road congestion, population growth, and more concern about the environment. The political climate in the 1980s was very anti-rail. That has relaxed somewhat although I would hardly call the present government strongly pro rail.

Other countries such as Germany have followed suite, and handed over certain services to people like the National Express group or Transdev. I am sure these would also be delighted to make a bid for Amtrak.

I believe the EU now requires all member countries to allow open access to its rail infrastructure. This is why you see more of this in Europe such as OuiGo, FlixTrain, European Sleeper, and many others.

 

[cirdan]

That has relaxed somewhat although I would hardly call the present government strongly pro rail.

The present government is not pro rail at all, and neither was any government in recent decades.

But public opinion is pro rail, and sometimes public opinion forces the hand of the government.

 

[Dean]

Response from Rail Passengers' Association: https://www.railpassengers.org/site/assets/files/47976/hotline_1387.pdf