Amtrak vs Megabus Round 2

"Railroads have failed to make a profit on full-service dining cars,lunch-counter cars, food vending machines, cafe cars and food carts."

But surely some kind of bizarre paradox is at work here; because "full-service" dining facilities; lunch counters, vending machines and food carts (ever been to Farragut Square in DC at lunch time?) manage to operate in the non-passenger-rail-car world, and make profits. And they don't even have a captive audience.

"We have a lot of half-full corridors across the country and we're running the equivalent of UAL first class-size seats plus a rolling 110mph mcdonalds all for $20-30 for a four hour ride"

This was amusing, but again, how many people are choosing the train over the bus for exactly these reasons? Somehow I think if the non-NEC trains provided an experience like Megabus, they would be in even more dire straits than they are now.

ThirdRail7 wrote:And you know any of this how? Just because YOU can't see them doesn't mean a great deal of Route & Service Evaluations haven't been processed, analyzed and presented to various states.

I'm not sure if you're aware of this, but Amtrak operations are funded by Congress and various states along with some revenue from the trains. New equipment will not be ordered until funding is found which as stated above means the most judicious use of stretched equipment must be considered. What is the best bang for your bucks? Well, a lot of that depends on what the the affected states think when they see the various proposals. You might have missed it, but a lot of states are lacking funding themselves.

I'm also not sure if you're aware that Amtrak owns very little tracks outside of the NEC. Unlike buses which can just appear at a corner, private entities (some of which are hostile) own the vast majority of territory the trains will operate on. How much will these hosts charge in fees is something that weighs deeply on the various proposals.

In closing, for you to say that Amtrak doesn't provide guidance, marketing, research and other forms of assistance is wildly untrue. I've said it before and I'll say it one more time:

The bane of my presence on this board is not being able to pass the information that exists since it is usually labeled proprietary/confidential and/or not for external dissemination.

The plans that have been deemed acceptable are there. Now, all someone has to do is fund them and I'll tell you, some of the new service proposals, route extensions and changes, bus feeders and equipment changes that have been analyzed and presented (and dismissed for various reasons) would make your mind melt.

Sorry, no, I can't see most of them. I've seen a few that were clearly requested and paid for by the states.

I think what is coming out is a frustration at missed opportunities -- opportunities that Megabus can exploit while Amtrak seems to be doing the same old same old.

Our politicians at both the state and federal level can't seem to comprehend the generational change that's happening in transportation. Millennials are ready to take the bus or train. Megabus caters to the younger generation by offering easy booking and ticketing on their smartphones and wi-fi access on the bus. The politicians don't understand it. Toyota is likewise baffled that young Japanese men aren't interested in buying a car. http://www.bloomberg.com/news/2013-10-0 ... -cars.html" onclick="window.open(this.href);return false; New York subways are seeing their highest ridership since Harry Truman was President. http://nypost.com/2013/03/12/subways-sm ... er-record/" onclick="window.open(this.href);return false;

Railroads require big capital outlays. So do highways. But you'll not hear a politician talking about "rationalizing" the highway system in the face of deteriorating roadway conditions and decreasing traffic. There's no "Highway Investment and Improvement Act" with a 5-year plan to turn over federal highways less than 750 miles long to the states.

And while in my mind I think that there are plenty of win-win opportunities with the Class I railroads, my last experience with one was vexing.

jstolberg wrote: Railroads require big capital outlays. So do highways. But you'll not hear a politician talking about "rationalizing" the highway system in the face of deteriorating roadway conditions and decreasing traffic. There's no "Highway Investment and Improvement Act" with a 5-year plan to turn over federal highways less than 750 miles long to the states.

Probably because automobile traffic isn't decreasing. Its increasing. Sure, younger people are less likely to own a car now, but total vehicle-miles traveled are still increasing, IIRC.

And highways aren't being turned over to the states because they already are owned and maintained by the states. The feds have never done any more than develop standards and overall plans.

So while I conpletely agree with you, I must point out that that wasn't the best comparison.



And so as not to be off topic, I'd like to second the fact that the comfier accommodations and food service are the main things drawing me to NEC trains rather than Megabus. I tried megabus once from Boston to DC since it was $10, while the same Amtrak ticket would be at least $100, and I can honestly say I'd rather pay 10x as much to get the better service. It was nice to be able to go grab food and drink, and be in a seat I can actually fit in, which megabus certainly doesn't even compare on.

deathtopumpkins wrote:Probably because automobile traffic isn't decreasing. Its increasing. Sure, younger people are less likely to own a car now, but total vehicle-miles traveled are still increasing, IIRC.

Nope, vehicle miles driven peaked in 2007, took a dip with the coming of the Lesser Depression, and has mostly drifted sideways since:http://www.calculatedriskblog.com/2013/ ... ed-16.html The increase noted in the url refers a slight YOY increase for July 2013. And there were interstates before then that were the equivalent of an empty train: e.g., I-15 between Idaho Falls and Butte. There could be much rationalization of the highway system even if miles driven were increasing.

Station Aficionado wrote:

deathtopumpkins wrote:Probably because automobile traffic isn't decreasing. Its increasing. Sure, younger people are less likely to own a car now, but total vehicle-miles traveled are still increasing, IIRC.

Nope, vehicle miles driven peaked in 2007, took a dip with the coming of the Lesser Depression, and has mostly drifted sideways since:http://www.calculatedriskblog.com/2013/ ... ed-16.html The increase noted in the url refers a slight YOY increase for July 2013. And there were interstates before then that were the equivalent of an empty train: e.g., I-15 between Idaho Falls and Butte. There could be much rationalization of the highway system even if miles driven were increasing.

Well if those numbers are correct, then I guess I stand corrected on that point!

And again, I agree. But think of those empty western freeways as the equivalent of Amtrak's mandated long-distance trains. There is absolutely no question that they do not carry the traffic volume to warrant 4 lanes, much less a full freeway, but Congress mandated that they be built. Just like how the Amtrak LD trains are unquestionably a financial drain and in most regards unnecessary.

Freeways in fly over states exist for the same reason planes fly over these states, to support traffic generated elsewhere.

Adirondacker wrote:

Gilbert B Norman wrote:..I can think of one city pair for which Amtrak and a bus operator could partner in this area but yet they do not - and that is in the Chicago-Columbia MO market. ...

So there's not enough demand to scare up a bus four times a day but running a train with many times more seats would be a good idea?

Where did he mention adding a train? I understood him to mean establishing a bus connection, with through ticketing, using existing trains. If college travel wouldn't justify daily service, maybe something could be done on weekends.

JoeG wrote:I am startled to see ideas on this thread suggesting that Amtrak could make money serving food on its trains. As far as I know, no railroad in America has ever made a profit on food service. Railroads have failed to make a profit on full-service dining cars,lunch-counter cars, food vending machines, cafe cars and food carts.
If anyone can show a case where I am wrong, I'd be delighted to see it.
Many food service ideas sound great to me. But, they turn out to be money losers.
Why should the real and hypothetical trains discussed on this thread be any different?

I have been reading this thread for the past few days which has meandered from Amtrak vs Megabus smackdown to Amtrak food & beverage losses. The odd thing to me is that no one in this thread or on this forum from I read has brought up the bold statement that Boardman made last week in the news release: Amtrak Commits to End Food and Beverage Losses. Boardman committed to ending F&B sale losses in 5 years with investments in IT, POS systems, better management. According to the news release, cafe car services across the system now essentially break even or run at a surplus. The F&B sale losses are in the LD trains where the goal is to eliminate those losses in 5 years.

IMO, if Amtrak can cut the LD diner car losses by 75% or 50%, that will go a long way to blocking attacks by Congress on Amtrak F&B sales and the LD trains. Why there is not a thread on this topic on this forum, don't know. No one else checks the Amtrak news releases?

First part of the press release:

WASHINGTON –Amtrak is moving forward with a plan to eliminate its food and beverage losses over five years. It builds on successful initiatives implemented since FY 2006 that have increased the cost recovery rate from 49 percent to 65 percent.

“We have made steady and consistent progress, but it is time we commit ourselves to end food and beverage losses once and for all,” said President and CEO Joe Boardman. “Our plan will expand initiatives that have worked, add new elements and evolve as updated information and opportunities lead us to better solutions.”

Amtrak Inspector General Ted Alves agrees improvements have been achieved and testified before Congress that “over the last several years, Amtrak has taken action to reduce food and beverage losses and improve program management controls and these efforts have yielded benefits. We believe opportunities remain for further improvement.”

In inflation adjusted dollars, the Amtrak food and beverage loss is down $31 million, from $105 million in FY 2006 to a projected $74 million in FY 2013—or about a 30 percent move in the right direction.

Amtrak should not really treat Megabus as competition, but rather as a complementary service.
And I have said many times that the most cost effective way for Amtrak to expand is more thruway bus services.Even if they appear to compete with existing Amtrak services.

Tadman wrote:You've got to sell a lot of Amburgers or microwave pizzas to make up the lost revenue of 74 seats that would otherwise occupy that space. You've also probably got triple the maintenance costs, because of all the food prep equipment. It's accepted gospel that cafes and diners have been money pits since time immemorial.

This is sadly true, although in the grand scheme, it is the Diners that are probably cost 3x their revenues while the Cafes cost 1.5x their revenues and its averages out to costing 2x their revenues (losing $1 for every $1 they take in). We don't quite know how bad the Diners vs Cafes are, but we know that even the Downeaster (who contracts out its cafe staff/ops) loses money on its cafe ops (pays a slight subsidy to the operator) and loses even more money when you consider the cost of the cafe lease (vs what a coach full of ticketed passengers would pay or what deleting the cafe would save)

So the point is right, but for me the conclusion is gradual: start by changing sleeper-diner trains into coach-cafe where demand is sufficiently dense (see my Scrap Cresilvers for Day Trains Thread The trip will be unpleasant--but it will be that essential trip that Megabus has been nimble enough to identify, tap and profit from but Amtrak has not, serves with sleepers, and looses $600m a year on.

afiggatt wrote:The odd thing to me is that no one in this thread or on this forum from I read has brought up the bold statement that Boardman made last week in the news release: Amtrak Commits to End Food and Beverage Losses. Boardman committed to ending F&B sale losses in 5 years with investments in IT, POS systems, better management. According to the news release, cafe car services across the system now essentially break even or run at a surplus. The F&B sale losses are in the LD trains where the goal is to eliminate those losses in 5 years.

IMO, if Amtrak can cut the LD diner car losses by 75% or 50%, that will go a long way to blocking attacks by Congress on Amtrak F&B sales and the LD trains. Why there is not a thread on this topic on this forum, don't know. No one else checks the Amtrak news releases?

First part of the press release:

WASHINGTON –Amtrak is moving forward with a plan to eliminate its food and beverage losses over five years. It builds on successful initiatives implemented since FY 2006 that have increased the cost recovery rate from 49 percent to 65 percent.

“We have made steady and consistent progress, but it is time we commit ourselves to end food and beverage losses once and for all,” said President and CEO Joe Boardman. “Our plan will expand initiatives that have worked, add new elements and evolve as updated information and opportunities lead us to better solutions.”

Amtrak Inspector General Ted Alves agrees improvements have been achieved and testified before Congress that “over the last several years, Amtrak has taken action to reduce food and beverage losses and improve program management controls and these efforts have yielded benefits. We believe opportunities remain for further improvement.”

In inflation adjusted dollars, the Amtrak food and beverage loss is down $31 million, from $105 million in FY 2006 to a projected $74 million in FY 2013—or about a 30 percent move in the right direction.

If Cafes broke even (and I don't think they do once you include the cost of the cafe car itself--and ask how much $ it costs or how many passengers would have paid for that car) then all that means is that the loses on the Diners are *enormous* in order to throw the whole F&B system into a loss....the Diners would be not just losing their own money, but also eating up (any) profit made by the Cafes .

I just think they both lose money and the Diners are "worse (or that Amtrak will only succeed in shrinking the diference). If you blame all losses on Diners then you *really* have to ask: if we could make money on Cafes (that provide most of the benefits) why would we EVER run a loss-making Diner?

Yes, Amtrak is working to fix the Diners because so much of their loss was outright theft by staff--according to Congressional testimony this was selling food to Coach passengers and charging it to Sleeper passenger's food buget---and hence the emphasis on "Point of Sale" technology

But I don't see the Diners ever clawing their way back to where the Cafes are either are or could be. My conclusion: Keep the Cafes and their gentle losses, start ditching the sleeper-diners.

David Benton wrote:Amtrak should not really treat Megabus as competition, but rather as a complementary service.
And I have said many times that the most cost effective way for Amtrak to expand is more thruway bus services.Even if they appear to compete with existing Amtrak services.

Calling them "complementary" is a dodge. If the bus is cheaper, more profitable, and works on the same route network (either as overlay or extensions) then it is not just "complementary," not just "competition," but a legitimate full modal replacement for the train. Except for the mental inertia that can't imagine deleting the train from the picture, we'd have already concluded that $600m/yr (LD losses) could subsidize a much larger network of buses (many of them profitable on their own, and our subsidy dollars going much farther by bus), serving far more communities and passengers, more often, at lower ticket prices, on a denser network--than LD trains do.

So the challenge is to be honest with ourselves: if we honestly believe that trains can provide essential transportation, then the should do so with lower costs, nimble routing, and more day service. Not all the way to a cramped bus, but certainly looking more like the Carolinian and Palmetto.

Jersey_Mike wrote:Many people cite the value of Amtrak Long Distance trains to rural areas after airlines largely stopped serving such communities and then Greyhound cut back some years ago. More recently some of the new discount bus services seemed to step in to fill the void. Well it looks like they are stepping out again and leaving rural communities in the lurch. Just an FYI for those who get into Train vs Bus arguments with the Anti-Amtrak LD crowd.

http://www.nytimes.com/2013/10/06/us/by ... -void.html" onclick="window.open(this.href);return false;

You have not (yet) made it a fair comparison, but what if you put the LD "franchise" for "essential rural community ground transportation" out to bid and allowed the buses to bid on it--whomever demands the lowest subsidy (either in $ terms or in farebox recovery terms) wins. How many would the train win?

So here's where Amtrak can--and should--beat the bus (there's lots of overlap here, but the idea is they are all things that highway modes cannot do:)
1) Wherever electrified (low emissions / cheap domestic fuel)
2) Wherever operating at 110mph (super speeds)
3) Wherever operating above 79mph (still safer+faster than bus)
4) Any trip into a dense metropolitan core at rush hour (CHI, ATL, NYP, BOS, WAS, PHL, California)
5) Wherever highways are congested for more than 4 hours per day

I'm a wee bit confused, Mr Arlington. Let's review.

First you say:

Arlington wrote: Calling them "complementary" is a dodge. If the bus is cheaper, more profitable, and works on the same route network (either as overlay or extensions) then it is not just "complementary," not just "competition," but a legitimate full modal replacement for the train. Except for the mental inertia that can't imagine deleting the train from the picture, we'd have already concluded that $600m/yr (LD losses) could subsidize a much larger network of buses (many of them profitable on their own, and our subsidy dollars going much farther by bus), serving far more communities and passengers, more often, at lower ticket prices, on a denser network--than LD trains do.

So the challenge is to be honest with ourselves: if we honestly believe that trains can provide essential transportation, then the should do so with lower costs, nimble routing, and more day service. Not all the way to a cramped bus, but certainly looking more like the Carolinian and Palmetto.

In the next breath, you mention:

Arlington wrote:So here's where Amtrak can--and should--beat the bus (there's lots of overlap here, but the idea is they are all things that highway modes cannot do:)
1) Wherever electrified (low emissions / cheap domestic fuel)
2) Wherever operating at 110mph (super speeds)
3) Wherever operating above 79mph (still safer+faster than bus)
4) Any trip into a dense metropolitan core at rush hour (CHI, ATL, NYP, BOS, WAS, PHL, California)
5) Wherever highways are congested for more than 4 hours per day

It once again show the prejudicial stance you demonstrated in your Crescent/Silver thread. The costs of such corridors are immensely more than it cost for a bus to operate over the same route. Once, again, you've proved you're willing to spend BILLIONS upon BILLIONS on train travel for a few "dense" segments while completely ignoring others, which probably would cost less than the NEC. In case you missed it, Amtrak is in the process of modifying the tracks on the raceway to accommodate the new catenary. This is 456 million (before overruns) for a grand total 24 miles of railroad. You're closing in on a half billion dollars of costs and you still have 204 miles to go!

Arlington wrote:

Jersey_Mike wrote:Many people cite the value of Amtrak Long Distance trains to rural areas after airlines largely stopped serving such communities and then Greyhound cut back some years ago. More recently some of the new discount bus services seemed to step in to fill the void. Well it looks like they are stepping out again and leaving rural communities in the lurch. Just an FYI for those who get into Train vs Bus arguments with the Anti-Amtrak LD crowd.

http://www.nytimes.com/2013/10/06/us/by ... -void.html" onclick="window.open(this.href);return false;

You have not (yet) made it a fair comparison, but what if you put the LD "franchise" for "essential rural community ground transportation" out to bid and allowed the buses to bid on it--whomever demands the lowest subsidy (either in $ terms or in farebox recovery terms) wins. How many would the train win?

More gibberish. Let's take it from the top. Jersey Mike has made perfectly clear in the Fung Wah Bus Line "Shut Down": Potential gain for NEC? thread that it will never be a fair comparison:

Jersey_ Mike wrote:
I always respected Fung Wah for providing a cheap and efficient service while keeping casualty rates within acceptable limits. I've said it before that this heedless drive towards "health and safety" is going to eat our country alive as more flexible countries like the BRICs readily accept less "safety" in exchange for greater economic growth. Moreover public transport providers face an enormous hurdle in terns of being able to compete effectively with private vehicles when a much higher accident rate is considered acceptable for private vehicles compared with public transport. By holding railroads and bus companies to such high standards, riders are necessarily forced into private vehicles where they will then die at higher rates. That's right, increased "safety" kills people.

BTW don't think this probably wasn't a hatchet job by the more "reputable" carriers trying to force Fung Wah out of the market. I would like Amtrak to succeed on its own merits, not as a side effect of anti-competitive maneuvering. Just be glad that our country isn't doing that open track access thing that is so popular in Europe because Fung Wah Train would decimate Amtrak's position. Hell, I'd ride it in a heartbeat without thinking twice. Not only would it be cheaper I'd get more interesting rolling stock like cast off AEM-7's, ALP-44s and Comet I coaches.

I didn't necessarily agree with some of his follow up comments, but he essentially hit the nail on the head. it will never be a fair comparison due to the inherent infrastructure demands that you never comprehend or understand.

There are those who think there should be a balance transportation network. The finances shouldn't always dictate the end result. I'm very pro-ferry which is another industry that often fails to turn a profit. However, it could be part of a broader, balanced transportation discussion if people look at the greater picture versus profit. Along those lines, I'd like to double down on your subsidy challenge.

Imagine if Mega Bus, Greyhound et al had to completely finance every single road they operated on. Imagine if they were completely responsible for every single bridge they crossed. Imagine if they were no longer allowed to have curbside drop off and pick up and needed designated terminals. Imagine if the federal government said any bus driver that exceeds the speed limit by 9 miles loses their license. Imagine if the federal government then told the bus operators that all of their buses must be built to withstand the impact of a collision with a double semi truck traveling at 65mph. On top of that, what if the government stated every single bus line must install and maintain a system that would reduce the likelihood of collisions.

Now imagine Amtrak and the freight operators paying a (relatively) small tax for rail usage, being able lay rail whenever and wherever they want with minimal oversight and regulation. Imagine the railroad operators hiring people that routinely violated the HOS of service laws. Imagine the rail carries having collisions and after being shut down, they have the ability to merely change their name, lease buses and continue operations a few hours later.

How can you even mention "fair" and "comparison" in a topic that talks about trains and buses? This of course brings us to your summary:

Arlington wrote: So the challenge is to be honest with ourselves: if we honestly believe that trains can provide essential transportation, then the should do so with lower costs, nimble routing, and more day service. Not all the way to a cramped bus, but certainly looking more like the Carolinian and Palmetto.

Trains by nature cost a lot of money. This is due to federal guidelines. While you routinely overlook the infrastructure costs of your increasingly wild plans, those who see what they can approach can not. Based upon your simplistic statement, there should never be another train or subway operating in this country. The regulation and the costly, inflexible physical plant (which impacts "nimble routing") will always be a liability. Additionally, as you call for more "day trains" you have to arrange for their federally mandated inspections which are extremely costly and time consuming.

Until Greyhound has to salt and plow, sand and paint the bridges they use, there will never be a fair comparison. A bus will always have a lower cost structure. The tide may turn soon though. As electronic tolls eliminate the costly and obstructionist toll plazas, more areas will start charging tolls. There is even a effort to allow the states to start tolling the interstates. Previous efforts have been shot down, but the tide is slowly turning. When previously free roads and bridges are tolled in a few years, I think you will see bus operators taking a good look at their operations and costs. Yes, they will always be cheaper than a train, but the rush to expand and the fare structure will most likely change.

David Benton wrote:Amtrak should not really treat Megabus as competition, but rather as a complementary service.
And I have said many times that the most cost effective way for Amtrak to expand is more thruway bus services.Even if they appear to compete with existing Amtrak services.

The bus connections should feed passengers on to the trains. Thus they can do the work which was once performed by branch lines.