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Forum Post: Amtrak Food Service Lost $834 Million in 10 Years

Posted 1 year ago on Aug. 5, 2012, 2:45 p.m. EST by zhazha (1)
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Anudder gubment run enterprise losing money...

Amtrak Food Service Lost $834 Million in 10 Years, Mica Says

Jeff Plungis, Bloomberg News

Thursday, August 2, 2012

Aug. 2 (Bloomberg) -- Amtrak lost $84.5 million selling food and beverages last year and $833.8 million over 10 years, House Transportation and Infrastructure Chairman John Mica said, calling for a “better way” to run those operations.

It costs taxpayers $3.40 for each can of soda the U.S. passenger railroad sells on its trains, and Amtrak charges $2.00, the Florida Republican said at a hearing today.

Taxpayers subsidized $68,477 in losses in 2011 for each Amtrak food-service employee, he said, citing Government Accountability Office estimates.

“At a time of running multitrillion-dollar deficits, we’ve got to look at every area of government,” Mica said. “Hardworking Americans are underwriting these losses. There has to be a better way.”

The hearing comes as Amtrak, which has lost money throughout its four-decade history, is laying out plans to build a high-speed rail network in the corridor between Washington and Boston.

Last month, Amtrak proposed a renovation of Washington’s Union Station that would cost at least $6.5 billion, and published a $151 billion plan for bringing 220-miles-per-hour service to its Northeast Corridor, the only route on which Amtrak gets enough revenue to cover operating costs.

Republican proposals to use more outside food-service contractors would eliminate Amtrak jobs with good wages and benefits, and replace them with low-wage positions, said Nick Rahall of West Virginia, the panel’s senior Democrat.

‘Cheaper Cheeseburgers’

Food costs aren’t the major cause of Amtrak’s financial difficulties, and congressional micromanagement has made it impossible for Amtrak to make good decisions, Rahall said.

“This is a whopper of a bad idea if I have ever heard one: trading good-paying jobs with benefits for cheaper cheeseburgers,” he said.

Having food service on routes covering more than a few hours is a essential component of running trains, Amtrak Chief Executive Officer Joe Boardman said at the hearing. Reducing on- board service may cause people to stop riding and lead to higher losses, he said.

In 2006, the railroad recovered 49 percent of its costs on food. In 2011, the figure was 59 percent. The goal for 2015 is 70 percent, Boardman said.

Amtrak contracts out its commissary functions while using its own workers to serve food and beverages on trains. Legislation proposed last year by Representative Jean Schmidt, an Ohio Republican, would require the on-board operations to be contracted out to companies.

‘Different Animal’

Maine loses about 37 cents per passenger using a contractor on trains the state runs in partnership with Amtrak, while Amtrak itself loses about $2.80 per passenger, said Representative Bill Shuster, a Pennsylvania Republican.

“I want Amtrak to succeed, but it can’t keep going on the path it’s been going on for 20 years,” Shuster said. “Monopolies shouldn’t lose money.”

About 88 percent of Amtrak’s food-service losses occur on its long-distance routes, said Ted Alves, the railroad’s inspector general. Employees who are on trains for three or four days at a time have more duties than a typical fast-food worker, Alves said.

“We have to recognize it is a very different animal,” Alves said.

Read more: http://www.sfgate.com/business/bloomberg/article/Amtrak-Food-Service-Lost-834-Million-in-10-3757613.php#ixzz22hMMhPDj

5 Comments

5 Comments


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[-] 2 points by TitusMoans (2367) from Boulder City, NV 1 year ago

By all means let's cut the wages of all Amtrak workers to minimum. They, too, should live below the poverty level while the politicians, especially the fat-cat ones like Darryl Issa, John Boehner, etc, continue to feed at the public trough for life with no simple-minded lemmings pointing fingers at them for robbing the taxpayers.

In fact all Americans except politicians and the aristocracy should be reduced to minimum wage so as to increase profits for the corporate state. Let's start with people like you.

[-] 0 points by zhazha (1) 1 year ago

So push a product or service when there's not a demand for it ???

[-] 1 points by TitusMoans (2367) from Boulder City, NV 1 year ago

The article does not propose doing away with Amtrak or the dining facilities, it proposes outsourcing culinary jobs to private contractors to reduce labor costs; the suggestion is to fast-food-worker levels.

[-] 1 points by MattLHolck (16833) from San Diego, CA 1 year ago

public transportation (commences) is a useful service

[-] 0 points by JonFromSLC (-107) from West Valley City, UT 1 year ago

All this, and California still has a love affair with light rail. Mind = blown.