Amtrak: Wall and K Streeters ridin’ the rails … on our dimes.

Noticed a couple of articles re: Amtrak’s record-breaking ridership …

Reportedly,  Amtrak broke a number of records in fiscal 2013

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In fiscal 2013, Amtrak hauled 31.6 million butts …  forking out $2.1 billion in ticket revenue

More than a third of traffic was along the Northeast Corridor, between Washington, NYC and Boston.

  • New York’s Penn Station was the busiest, with 9.6 million passengers.
  • Washington’s Union Station was the second busiest station, with 5 million passengers.
  • Philadelphia’s 30th Street Station was number three, with 4.1 million passengers.

So, who’s riding Amtrak, and how much are you paying paying for their rides?

Don’t confuse Amtrak with lower-end Greyhound …

Amtrak’s typical riders are not low-income Americans.

The poor are less likely to travel by Amtrak than by most other travel options.

Only 13 percent of Amtrak passengers have incomes below $20,000.

The average Amtrak rider has a higher household income than the average taxpayer.

In fact, the clientele …  consists largely of Wall Street traders, K Street lobbyists and other affluent business travelers.

These folks aren’t poor. Source

On average, these folks are shelling out about $66 per 1-way ticket.

Amtrak’s “farebox recovery” – the percentage of operating costs covered by revenues generated by passenger fares — is less than 80%..

Said differently, Amtrak loses 20% on each fare.

The Feds make up the difference … subsidizing  the losses to the tune of about $500 million annually … plus the Feds ante in about $1 billion each year for capital expenditures. Source

Is it worth it?

Right-leaners argue no.

Otherwise, value-deriving passengers would be willing to pay at least enough in fare to cover operating expenses.

Left-leaners argue that connecting Blue-state metropolises is a governmental infrastructure responsibility and adds some macro-economic benefits that aren’t reflected on Amtrak’s P&L.

My view: jack up the prices and see what happens.

Maybe WallStreeters and K-Streeters are are insensitive to price … especially since their companies … err, make that their clients … end up paying the freight.

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2 Responses to “Amtrak: Wall and K Streeters ridin’ the rails … on our dimes.”

  1. Alex S Says:

    I agree, Ken. Jack up the prices. And do away with the subsidies, so that the free-loading clientele pay full freight! And then, finally, let’s enable the industry’s dynamics to be determined purely by the free market forces.

    Oh, and while we are on that track, let’s do away with energy industry subsidies across the board, too. See link below – Why the heck should we subsidize BIg Oil, when its oligopolistic industry operators are making the record profits year-after-year?
    .
    http://1bog.org/blog/what-if-solar-power-had-fossil-fuel-like-subsidies-infographic-b/

    Are there any other industries that you think we should ask the government to stop subsidizing and manipulating?

  2. Chris Says:

    Is there a break-down of how they arrived at that $66 average fare? Wall & K-streeters take the Acela, and I can assure you that costs a lot more than $66. I often take the DC-NY trip myself, and the one-way cost ranges from 120-220, and more like 180-220 for the preferred time slots. So while I understand that taxpayers are subsidizing Amtrak, it seems to me that the business travelers are subsidizing the “normal” folks. I’m the furthest thing from left-leaning, but isn’t that what we want?

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