A Pricy Ride

[daveklepper]

Of course your regular commuter who has a monthly pays far less for his ride than your one-way Metro North ticket/

From about 1970 through 1995 I was a regular commuter on Metro North, reverse commuting from NYC to White Plains N. Station.  I thought the service good and the fares reasonable.   On weekends | often served as a volunteer at Branford, and used Metro North to and from New Haven, usually only having to pay a step-up on my commuter ticket, which was good on the New Haven line as far as Harrison.   But on occasion, after a long day at Branford, I would spring for the extra cash and buy the far more expensive one-way Mew Haven - NY coach ticket to enjoy regular Amfleet coach comfort and the availability of a snack-bar.   Did not have the kind of income to do this very often, however.

One day I did do it, and on the platform, watched the GG-1 backing down on the train, with an old friend leaning out of cab window as engineer.   Got a cab ride to Penn Station as a result.   Did give the conductor my ticket at Penn Station.   The day happened to be the 75th Anniversary of the amalgamation the formed the New Haven Railroad, but by then it was Conrail or PC and operated for Amtrak.   I put that in my book along with rideing the very last eastbound UP City of LA.

[uphogger]

Uh, Sam, who paid for the highway the Bolt Bus travels on?  Your trip to the grocery store is subsidized by the taxpayer.  There is no transportation system in this country, save rail freight that is not subsidized in some way.  I run commuter passenger trains for UP under the Metra aegis.  Quite frankly, the passenger operations are the only things operating on our tracks south of Lake Bluff on the Kenosha Sub, and only a wayfreight east of Seeger on the Harvard Sub.  Those aren't going to pay the freight for the passenger operations, yet none of our riders would probably think the cost is too high to keep running the scoots.  We parallel the Edens and Kennedy for a few miles, always packed at rush hour.  If we were to cease our passenger operations, can you imagine what several thousand extra automobiles would do to that traffic?  I agree that money should be spent wisely and watched very carefully, especially in the light of the Phil Pagano affair and other scandals.  But that said, we need more than just air and highway modes for our future. 

[henry6]

Probably could be thought of more today as there is less variety, more standardization of equipment, more solidarity among the crews working for one railroad, etc.

[HarveyK400]

henry6

...Probably not, but the utilization of a trainset instead of sets which might otherwise be deadheaded, the service of one seat/one ticket ride through 30th St, or Newark or NYP or New Haven just might be both a marketable and an efficient transportation operation.    I am sure Chicago's METRA having taken over so many different railroad operations might be able to find through line ticketing and connections which would be an attractive service, too.

....

Some through services for Chicago were considered in 1973 but never pursued.  These involved running Aurora (BN) and Joliet (RI) trains through through Union Station to Fox Lake (MDN) and Elgin (MDW) respectively.  This followed ridership analyzes and forecasting for Cleveland and Chicago (L-DR & H-DR), the latter done by the IDOT Office of Research & Development instead of the Chicago Area Transportation Study.  Chicago had five separate suburban terminals between 1971 and about 1976 until the NW Orland Park train was taken over by Metra and shifted from the Polk Street Annex (Dearborn Station) to Union Station.

 

[henry6]

Amtrak got rid of the services and local, metropolitan transit agencies or authorities took over commuter operations, thus the disconnections.  Part of the reason for and the fun of my Ride With Me Henry trips it to utilize the connections and services which are not advertised and often not recognizable at quick glimpses of timetables.  Any place on NJT to Trenton, SEPTA to downtown Philadelphia or anyplace else on SEPTA is easy...as is across the platform (alright, up the stairs, across the mezzanine, down the corridor) to the LIRR at NY Penn then to anyplace on LI is just as easy.  On 5/16 we will come to NYP from Hackettstown, NJ then Amtrak to Poughkeepsie, NY, MNRR to Grand Central, subway to NYP or PATH to Hoboken, then NJT back to H'twn.  LInks in NJ include Hudson-Bergan LIght Rail, Newark City Subway, The River LIne,  PATCO in Philadelphia and Camden, bus when and where if needed.  There is no interline ticketing, no "connection" schedules published.  But, to me, that's the fun of Ride With Me Henry.

But I must add that MNRR-CONNDOT and NJT have been using NJT trainsets and through schedules/tickets from New Haven to Secaucus Jct. for NY Giant football games, and LIRR does through ticketing for same, on a trial basis.  It is a step in the right direction for regionalizing the rail network...Would anybody (besides Ride With Me Henry) actually ride Providence to Wilmington?  Probably not, but the utilization of a trainset instead of sets which might otherwise be deadheaded, the service of one seat/one ticket ride through 30th St, or Newark or NYP or New Haven just might be both a marketable and an efficient transportation operation.    I am sure Chicago's METRA having taken over so many different railroad operations might be able to find through line ticketing and connections which would be an attractive service, too.

NJT does have an inexpensive and unique ticketing of NJT interline connections.  Ticket cost is based on the longest line-ride segment.  But they don't advertise or promote interline ticketing as a money savings way to travel.  Say, Hackettstown on the Morristown/Montclaire-Boonton Line to High Bridge, NJ on the Raritan Valley line: $15.75, the same as Hackettstown to Hoboken instead of plus the trip to High Bridge.  And with the Sr. discount I can do it for $6.75!  But if it weren't for my doing the Ride With Me Henry excercises I would never have found that out!

 

[HarveyK400]

daveklepper

I don't believe there is anything equivalent to Bolt Bus between NY and Philly, but there probably is between NY and Washington.   The market for a Bolt Bus between NY and Philly is well taken care of by the connecting services of NJT and SEPTA, who make available each other's schedules at NEC stations and at least at one time (currently?) did provide through ticketing, and for a very short time through equpment.   No reason a commuter service cannot also carry long distance riders who want to travel more economically.   On a trip from my White Plains office I had business in Glencoe and Rocikford, IL.   I used Metro North to NYC, the subway to Penn Station, Lake Shore to Chicago,. Metra to both Glencoe and Harvard, where my Rockford client met me.... So the through service would serve three groups of passengers, those traveling between major cities wanting a bargain and willing to put up with longer travel times, people traveling between towns that are bypasssed by the regional and Acela trains, and the off-peak local riders that are riding now.

Amtrak and transit operators have compartmentalized rail services that railroads once blended to fit the need.  Until 1963(?) CNW ran an overnight mail train out of Chicago on the Harvard Line that departed at 11pm and made all intermediate stops.  Some Chicago-Milwaukee trains made a greater number of suburban stops than the 400's, including Cudahy and South Milwaukee in Wisconsin.

[daveklepper]

I don't believe there is anything equivalent to Bolt Bus between NY and Philly, but there probably is between NY and Washington.   The market for a Bolt Bus between NY and Philly is well taken care of by the connecting services of NJT and SEPTA, who make available each other's schedules at NEC stations and at least at one time (currently?) did provide through ticketing, and for a very short time through equpment.   No reason a commuter service cannot also carry long distance riders who want to travel more economically.   On a trip from my White Plains office I had business in Glencoe and Rocikford, IL.   I used Metro North to NYC, the subway to Penn Station, Lake Shore to Chicago,. Metra to both Glencoe and Harvard, where my Rockford client met me.... So the through service would serve three groups of passengers, those traveling between major cities wanting a bargain and willing to put up with longer travel times, people traveling between towns that are bypasssed by the regional and Acela trains, and the off-peak local riders that are riding now.

[daveklepper]

Note that I am simply suggesting (as is Henry) a way to use existing manpower and physical resources more effiently.   Off peak commuter trains can use extra business, and by connecting them and filling in the very short gaps, at least twice a day, some more cars will be taken off the highways because people will again find it convenient to go from Towsand Md to Branford, CT by train, where now three different tickets and two train changes are needed.   This does not mean that trains are necessarily competitive with buses for this type of bubsiness NE Corridor.   I am reaally mostly addressing Sam'scomplaint by wishing to balance Amrtak's desire to please  the most affluent (and serve everybody's interest in doing so) by pleasing the least affluent as well.

[HarveyK400]

henry6

You can't compare inter city service with commuter service because the two work on different business and operating models.  Equipment is different, schedules are different, distances are different, frequencies are different and varied.  Of course the customer may be the same but is purchasing a different service when he/she is going to and from work than when traveling to another city for business or for pleasure.  Can intercity be used for commuting or commuter be used for intercity?  Yes and yes.  But the comfort, speed, and time differences are often great, too.  For instance, an upcoming Ride With Me Henry trip this month includes NYC to Poughkeepsie.  In one direction we are using Amtrak @$23 in  1 hour 23 minutes the other we are using MNRR @ $15.75 in 1 hour and 47 minutes.  Aside leaving from NYP and returning via GCT, the ride and the service is quite different and our fellow passengers on each train will be different, too.  Sure, we're doing if for railfanning and we are not typical of the customers normally using either service, but those along with us will be able to experience and understand the differences for themselves.

Metra for one has express trains on some routes that significantly reduce travel time, just as for your Poughkeepsie ATK-MN example.  Granted, ATK seats are bigger too, and this affects train capacity.  As for business models that have a public benefit beyond the fare revenue, it makes more sense to maximize ridership and relevance to the public (which is a political component) if it doesn't affect the bottom line negatively.  On of my biggest gripes about the Hiawatha service is the high 1-way fare maximizing revenue per passenger and getting few passengers to justify a train while giving away a peak demand service with low monthly fares.  The Amtrak monthly pass is less than just the downtown Chicago parking cost, let alone gas & toll out of pocket costs.  That parking cost is not the case in Milwaukee and explains in part the lower ridership.

[henry6]

You can't compare inter city service with commuter service because the two work on different business and operating models.  Equipment is different, schedules are different, distances are different, frequencies are different and varied.  Of course the customer may be the same but is purchasing a different service when he/she is going to and from work than when traveling to another city for business or for pleasure.  Can intercity be used for commuting or commuter be used for intercity?  Yes and yes.  But the comfort, speed, and time differences are often great, too.  For instance, an upcoming Ride With Me Henry trip this month includes NYC to Poughkeepsie.  In one direction we are using Amtrak @$23 in  1 hour 23 minutes the other we are using MNRR @ $15.75 in 1 hour and 47 minutes.  Aside leaving from NYP and returning via GCT, the ride and the service is quite different and our fellow passengers on each train will be different, too.  Sure, we're doing if for railfanning and we are not typical of the customers normally using either service, but those along with us will be able to experience and understand the differences for themselves.

[HarveyK400]

oltmannd

 

daveklepper:

 

Commuter fares, for most of the passengers (who ride on monthly tickets), are more like one tenth of the fare on a mileage basis as compared with the average Acela fare.   Check it out!

 

 

NJT montly pass on NEC ~20 cents per mile

Acela NYP-WAS ~90 cents per mile

Amtrak Regional NYP-WAS ~50 cents per mile

Could rail fares be bus-competitive?  Assuming Acela at least breaks even at $0.90/mile with 1/4 the capacity of a multi-level suburban train,  the suburban train must come close to breaking even at $0.20/mile.  For Amtrak, the economy coach fare for a high-capacity economy train of multi-level cars still would be around $45 New York - Washington.

 

[henry6]

Yeah, I kinda overdid the bus bit in trying to be quick...truth is the bus vehicle is very comfortable and modern.  But the feedback is that neighborhoods where long distance bus terminals are are not very nice neighborhoods and a turn off to many would be riders.  Another problem with bus travel, and this is from bus drivers, is that more people get sick riding buses than any other form of transportation!!  At least that's what they told me.  Probably if only because one is unprepared for it unlike airplanes and knowing how one reacts in a car it may be true.  

[Paul of Covington]

   henry6, I agree with much of what you have been saying about the need for an integrated transportation system, but you said something that I see as a big stumbling block:  "buses are creepy."    In talking with others, I frequently find a disdain for buses.    Maybe they are seen as the last resort for the "lower class," those who can't afford cars; or people just don't want to ride with a bunch of strangers, I don't know.   In the last 50 years or so we have been increasingly afraid of being too close to each other.   Many, as soon as they can afford it, buy into their dream: a couple of acres outside of town.    Well, enough psychology and sociology, but this living pattern makes a shift to more public transportation more difficult.

    Back to buses.   Rail is expensive and can't be justified without very high traffic density.    Before even starting a new rail service, a good justification for it would be an existing heavily patronized bus service along the route in consideration, and after it's built it requires a good network of bus service to feed it.    How do you make buses more attractive?   I don't know, but as much as I love trains, I'm also a believer in good overall public transportation and the value of different modes supporting each other.   

[henry6]

Dave, you are espousing my concept of regional rail.  Run through trains with certain express stops to change to "locals" on coordinated and complimentary schedules.  Almost like the NYC subway come to think of it, but we don't have to talk in terms of across the platform connections every five or ten minutes but across the platform connections just the same.  Increase equipment useage, utilize labor (come on now, this is a proposal, a concept, not a working plan) better and economically, just make it a service that people can and will use, help the environment as well as the auto/truck congestion on the highways. 

[daveklepper]

I don't want to take sides in the above argument at this time, except to say the if the USA has a transportation policy, it is inconsistant as applied the various modes, varies depending who happens to be in the White House and who in the Senate and Congress.  Despite all that, things still seem to work better overall in the USA than any other country on this planet, remembering that civilization is not just getting from here to there (and enjoying marvelous scenery) but includes food, housing, clothing, healthcare, longetivity, pleasent environments, and a general feeling of freedom, and other important matters as well.   My only point is that Amtrak, whatever mistakes they have made and may still be making, did the right thing to establish the Acela service and to charge a premium fare for it.   And that their doing so benefits the public at large, not just those using the service.  And it benefits the riders of Bolt Bus as well.   And I don't have any indignation, rightous or otherwise, about Bolt Bus or its riders, just to state that they benefit from Acela's high fares and the money spent by the people who use that service and those (often not the riders themselves) that provide that money, and the money of the Amtrak subsidy.

There is a rail alternative to Bolt Bus in part of the corridor.  One can ride cheaply and reasonably fast from New York to Philadelphia, Wilmington, and Newark DE, by using a combination of NJT and SEPTA (or use NJT and its River Line and PATCO from Camden to Philadelphia).   I would join Sam in saying that Acela should be only one end of  the service and a real rail equivalent to Bolt Bus all the way from Boston to Washington at the other end, specifically a twice daily all-stops local that operates as a regular commuter train where tracks are shared with the six different commuter authorities (Boston's T, Shore Line East, Metro North, NJT, SEPTA, MARC) and with the matching low fares.   College students might be the bulk of the low-fare through riders.   It is a needed service.   The NEC does not now benefit one who wishes to go from Aberdeen MD to Guilford, CT or Canton, MA, and it should.   They are helping to pay for it.   And it would be easy for Amtrak to do it.   And it just might be as cost effective as Acela if done right.

[Paul Milenkovic]

henry6

 And stop making it a liberal vs conservative problem!

In what way did I claim the choice of transportation mode to be a liberal vs conservative debate?  When I pointed out that with respect to intercity common-carrier transport, we have a transportation policy, that transportation policy is deregulated airlines, and this policy had the backing of President Carter and the support of Senator Kennedy?  In other words, a policy that some around here would attribute to a libertarian/conservative think tank is actually one of Senator Kennedy's legislative achievements?

Cheap is not the only means of measuring?  Then what is?  Land availability?  When airplanes largely navigate the skies between airports whereas a rail line requires a continuous strip of land in between stations?  CO2 emissions and imported oil when the energy efficiency of Amtrak is only marginally better than the airlines?  Congestion?  When rail lines have congestion problems all their own, and where the NEC is approaching capacity without multi-billion dollar Hudson River tunnel projects?

And if cost is no longer the consideration but a whole list of intangibles become the metric, how do we quantify those intangibles apart from engaging in a political process?

[henry6]

Each individual means of transportation has advantages and disadvantages compared against themselves and against other forms.  Cheap is not the only means of measuring.  And if we were to have planners to start planning from a board that has infrastructure but no service, there is a completely different set of measurements and results to be dealt with.  Problems and control with the environment are not being considered here nor have been until just recently.  Congestion now and projected for the future is another item that has to be explored and solved.  I don't live near an airport, there are no buses going my way, there is no train service.  I only have a car so it doesn't matter what is cheaper or cheapest to me.  But in center city there are buses, subways, and even taxi cabs to choose from.  To get in and out of the city there is the car plus bus and train services.  And intercity there are cars, buses, trains and planes.  So if I have a car I can drive it to my destination or to a station point for a bus, train, or plane.  Or to a bus that takes me to a train that takes me to a plane.  Or not.  And stop making it a liberal vs conservative problem!  Politics have to be put aside and reality of environment, congestion, raw materials, land availability, fuel, cost of building any given infrastructure, cost of given vehicles, cost of labor, and so many more things other than political positions that will make the decision process.  And yes, it will be a combination of public and private organizations, public and private money, and government and private enterprise people working together to make it happen.  And its going to be different than it has been in the past.

[Paul Milenkovic]

airplanes are the fastest way to travel

Airlines are actually the cheapest way to travel.  Trains Magazine was already telling that in the 1960's, that a Boeing 727 jet had the Denver Zephyr beat, not on some ICC fully allocated formula but on direct operating costs.  This ran counter to intuition, that a low-tech earthbound train should cost more to operate than some delicate jet needing all manners of specialized maintenance, but maybe in terms of trains we were all thinking coal hoppers rather than passenger coaches with specialized maintenance requirements of their own.  The one thing that the jet had, however was speed, which means the same plane and crew could carry more passengers per hour than the train.

That airlines are the cheapest way to travel finally made it in to national transportation policy, namely, Alfred Kahn, President Jimmy Carter, and noteworthy support from that lion of liberalism, Senator Ted Kennedy.  Airline deregulation was indeed a policy, a governmental policy.  The policy is that someone recognized the low operating costs of planes, and the plane went from being this fancy venue of the "jet set" to being a bus with wings.  Why, a major European consortium to build airliners decided to call their product the "Airbus."

The knock on passenger trains is not that they are quaint and nostalgic.  The problem is that they are expensive, both in the capital requirements on account of the tracks and in operating costs, for reasons that I would like to better understand.

[henry6]

Yes, I am telling you and everybody else that.  And I'm not the only one saying this and many, many more involved in transportation have been saying the same thing for 50 or more years.  There is no coordinated transportation system, each works in its own orbit with very little regard for the other.  Only recently has the truck and rail industry really begun to understand their interdependency and ability to prosper together.  In government at all levels the same ignoring of one mode over another has caused all kinds of confusions, overlapping, under-serving programs.  Why does Europe have a wonderful rail system?  Because it is coordinated with itself, with air, and with highway options. We have air fighting rail fighting bus fighting private auto for passengers and similar fighting for freight between and among modes.  The public is clueless but planners have been warning us for years that we've got to put aside the differences and work on coordinating for economy, efficiency, and for environmental reasons, too.  Things are changing but slowly.  Rail and truck companies have been able to understand how they should work together with intermodal containers and trailers; that together they can provide a service that is profitable for both and is what the customers want and need.  For passenger services, we have barely addressed it: airplanes are the fastest way to travel; trains are quaint and nostalgic; buses are creepy; and the family automobile is in my driveway and cheap and ready to go when I am.  That is basically our transportation policy: chaotic, undefined, self serving, underutilized, expensive.  I am not talking political ideologies, not talking likeing trains, not talking being anti this or that, am talking about working everything together to work for all.  Can it be public?  Can it be private?  Probably, if US history is any indication, it will be both.  More importantly, it has to be.

[Paul Milenkovic]

henry6

The US does not have a transportation policy...

And you are going to tell me that the US does not have an energy policy, or a housing policy, or any number of other important policies.

The US does indeed have a transportation policy, as pointed out by Sam1, but it is not the transportation policy you agree with or the transportation policy you want.  For example, the transportation deregulation of the late 1970's, formulated by policy guru Alfred Kahn, put forward by President Carter, and strongly supported by the late Senator Edward Kennedy, that constituted a transportation policy.  The Staggers Act deregulating the freight railroads was a transportation policy.  Nationalizing the bankrupt eastern railroads, amalgamating them into Conrail, spinning off the Amtrak-run NEC as a passenger railroad, and then privatizing Conrail into CSX and other entities was part of a transportation policy. 

But that the national transportation policy is not the one you want is no excuse to claim there is no transportation policy, especially after being informed of what the transportation policy indeed is.

And yes, the transportation policy is decentralized in its planning, with the consequence that connections and interfaces between modes become more haphazard than what you prefer.

I am not going to go on a tirade against central planning either.  There is a blogger who goes by the name "Mencius Moldbug" who is a kind of iconoclast in not fitting in with either the right-wing or the left-wing party line -- if you want to read his stuff you can search that name on Google.  He points out that central planning or authoritarian government is often associated with the decline and fall of the Soviet Union, but just because something is centrally planned or a government exercises authority does not mean that government is ineffective at bringing about prosperity.  Examples given are Francoist Spain, where after following the anti-left party line Spain was run into the ground, Francisco Franco brought in technocrats, folks belong to Opus Dei of all things, presumably their Catholicism separating them from the atheistic Communist left, who actually turned things around and brought about prosperity.  Or the very late stage New Deal, where the Roosevelt people were still committed to a strong Federal government, but they threw out the rule book of most of what they did in the 1930's and managed to ramp up industrial production in anticipation of the need to fight WW-II.  Or post WW-II Germany, on the brink of mass starvation by 1947, partly because of the occupation policies of the victors, partly because of what the Germans may have been doing, where this one guy put in place reform policies that brought about the "German economic miracle" of postwar reconstruction.  Or the autocrats who ran Singapore, South Korea, and Taiwan (HSR anyone?) who brought about the reforms and prosperity of those societies.

But there are two principles working here.  One is, indeed, right-wing ideology of Adam Smith's Invisible Hand and self-organizing systems and prosperity coming out of seeming chaos.  The other is that there are perhaps more examples of failed central planning than successful central planning.  But just because the US transportation policy is not the one you want, don't tell us that we don't have one.

[henry6]

The US does not have a transportation policy...it is a haphazard patchwork system with no coordination or rationale...there is not sign of  "service" but rather groups of services, companies, modes, etc. that don't necessarily work together for the benefit of the public.  It is based on political lobbying for some modes and with some modes wanting the public to stay away.  Political pork barrel favors will give one community preference over another, one mode over another.   We need to have buses meet trains meet airplanes in addition to trains meeting trains and buses meeting buses so that a person can travel from one place to another without hours or days of waiting for connections.  Having a vehicle leave a point even 30 minutes before another vehicle arrives which could have been a connection is absurd.  There are times when a bus is perfect, other times a train, and another time an aircraft.  But it all has to be rationalized, scheduled, coordinated.  The thing that has to be done is that planners must sit down and look at the infrastructures in place and pretend non of it is being used.  Then start plugging in vehicle schedules, beef up some infrastructure here and there, eliminate some in some places, build new where needed.  Forget about existing operations, schedules, subsidies, etc. and redesign the system to provide a transportation service for both public and industry.

[Paul Milenkovic]

The other thing is that the suggestion that a bus company (Bolt Bus?) provides a cost effective common-carrier mode of transportation on the Northeast Corridor seems to evoke righteous indignation (I was going to call the use of exclamation points and all-caps emphasis something else, but would righteous indignation be sufficiently non-offensive to the parties involved?)

Yeah, yeah, the bus is subsidized in terms of using the highway, and yeah, yeah again, much of the highway subsidy is indirect (police patrols) rather than out of the gas-tax Trust Fund.  But the bus, to my knowledge, is receiving no subsidy from the wheel/pavement contact patch on up.  The only Amtrak train that appears to do the same thing is the Acela, which charges a much higher fare.  So to the extent that the Bolt Bus and the Acela pay their operating costs but depend on society at large to provide the roadway/track, by its much lower fare, the Bolt Bus is clearly the mode of transportation "for the rest of us" whereas the Acela appears to be a mode of transportation favored by the priviliged few, confirming the thesis of the grandparent post on this topic.

My question, however, is why a rail-borne conveyance could not be a Bolt Bus on steel wheels?  I don't know if Sam1 would go along with this, but suppose we level the playing field between modes by subsidizing the highways and in similar manner subsidizing the tracks and signals (and I will even throw in the stations as a "public good")  Why does the rail mode have to charge much higher fares than the bus in order to break even on the above-the-contact-patch costs?  Is there something technological about steel wheels on steel rails that is much more expensive than rubber on cement, or is the difference institutional?

[Anonymous]

henry6

Dave!  Your post above states exactly the problems with the US transportation policy: there isn't one and nobody understands the dependencies and independences of each mode.  While I know there is no zero point to go back to in order to redesign and replan, planners and the like have to mentally deesignate a date zero start planning, building and intergrating virtually from scratch, But they also need a good, down to earth, PR person who understands transportation and can explain in simple to understand terms to the populos! 

The U.S. has a transportation policy.  It is a framework that has relied on the wisdom of the people, as well as the free market system, to determine the winners.  The highways and airways won out for a variety of reasons.  Many of them can be summed up as better technologies.  There was no conspiracy to destroy intercity passenger trains.  They could not compete effectively after WWII, although they gave it a good go.   

If the United States has no transportation framework, how did it develop one of the best highway and airways systems in the world?  

Looking forward I would keep the same framework, except that I would make sure all modes of transportation at priced fully at the point where the user pays for them, i.e. ticket counter, pump, etc.  If the nation did this (it won't because of politics), then passenger rail might have a chance in relatively short, high density markets.  But it would be challenged given its cost structures.

In FY10 Amtrak passengers received a federal subsidy of 21.13 cents per passenger mile.  Airline passengers received a federal subsidy of 99/100s of one cent per passenger mile, whilst motorists (includes intercity bus operators) received a federal subsidy of 49/100s of one cent per vehicle mile traveled.  These were direct transfer payments from the federal government's general fund to Amtrak, FAA, and Highway Trust Fund or they were support services received from Homeland Security, Essential Air Services Program, etc.  

All modes of transport, including Amtrak, receive some indirect state and local funds to help defray their costs, although in the case of the airlines and motorists, because of their large population base, they pay the local funds through sales taxes, property taxes, etc.  Amtrak's passengers pay the same taxes, but there are not enough of them to complete cover the state and local fund sources.

Given the spread between the subsidies paid for intercity passenger rail and the subsidies paid for competing modes of transport, passenger rail would be challenged to compete in a free market, although with heavy restructuring it could be done.  But it could not stand on its own using the current methodologies.

Those who argue for a strong, centralized transport plan, are overlooking the fact that these arrangements have failed in most parts of the world.  Statism is out of vogue because it does not work. 

[henry6]

In your's and my mind zero point is today, Harvey, but the real zero point is when we allow planners, governements, and business to sit down and do what has to be done from that day on.  Yes, the ideiological framework you describe is the crux of the matter which is the part that has be be brought to zero to start the proccess or building anew (not rebuilding, but building anew).  It is not a matter of ripping out and replacing but about realocating and redesignating and reusing in new ways.

[HarveyK400]

henry6

Dave!  Your post above states exactly the problems with the US transportation policy: there isn't one and nobody understands the dependencies and inter-dependencies of each mode.  While I know there is no zero point to go back to in order to redesign and re-plan, planners and the like have to mentally designate a date zero start planning, building and integrating virtually from scratch, But they also need a good, down to earth, PR person who understands transportation and can explain in simple to understand terms to the populous!

The zero point is today; and it's what we do hereon out that is the important thing.  We have a lot of sunk investment in transportation; and the art is to use it as well as possible.  We can't afford to rip out and replace in most cases; but we can modify and enhance what we do have.  The ideological framework for small government and deregulation makes any central planning next to impossible.  Draw your own conclusions.

[henry6]

Dave!  Your post above states exactly the problems with the US transportation policy: there isn't one and nobody understands the dependencies and independences of each mode.  While I know there is no zero point to go back to in order to redesign and replan, planners and the like have to mentally deesignate a date zero start planning, building and intergrating virtually from scratch, But they also need a good, down to earth, PR person who understands transportation and can explain in simple to understand terms to the populos!

[daveklepper]

And Bolt Bus "covers its costs" and makes money for its owners only because ALL HIGHWAY TRANSPORTATION IS SUBSIDIZED.    Including Bolt Bus.    If it weren't for the NEC passenger trains traffic would be at a standstill anyway.   So in a sense the subsidy to the Amtrak's NEC also subsidizes Bolt Bus.    Beyond the lack of real estate taxes on superhighway land, beyond the police protection that is not covered by highway taxes, beyond State congribution to highway repairs that comes from the general fund and not highway taxes.

And the NEC upgrade was needed for decent Northeast Regional service as well as Acela and the Boston electrification was opened only with regular Amfleet operations.   Much of the upgrade, and any Amtrak expert will tell you this, was comonsation for long-deferred maintenance.

Long distance trains may be controversial, high speed in the midwest may be controversial, but everyone knowledgeable knows the NEC is essential to the east coast economy (and the USA in general) and needed an upgrade, still incomplete, very very badly.    And charging a premium price for the best service to cross subsidize the other services just makes excellent business sense.  Amtrak should be applauded for doing the right thing by all its customers, as well as the taxpayers by doing so. 

[HarveyK400]

I'm sorry I don't have notes; but some presentations at Northwestern U on Friday and at the Midwest High Speed Rail Association meeting Saturday  addressed the issue of public economic benefit justifying transportation infrastructure improvements for high-speed rail in particular and by extension Amtrak and transit generally.  Case in point: a $200M hotel and conference center opened adjacent the Normal, IL transportation center still under construction and before the Chicago-Saint Louis Corridor sees 110 mph service.    Long-term additional tax revenues from induced redevelopment and economic activity in cities are expected to outweigh the public cost for HSR improvements.  US population is expected to rise by 70M by 2035, almost all in urban areas, and bringing the urban proportion to 80%.

[schlimm]

Dave:  You said it!   sam1 makes some good points but keeps pushing the goal line.  The determination of full capitalization recovery costs in transportation seems a very murky area, even for accountancy experts.  Sticking with examination of the covering of operational expenses is reasonably transparent and pretty clearly Acela succeeds in doing so and maybe one or two of the other corridor services [CHI-StL and WASH-LYNCH] do also, with tiny surpluses.  In the case of Acela, its surplus over OE allows the entire NEC operation to have made $62.9 mil in FY 2011 through Jan.

[Anonymous]

daveklepper

The bottom line is that the Acela Service reduces and does not increase the overall subsidy of the NEC.   Any accounting analysis will prove this.   The Acela service either reduces the ticket price you and I pay for NE Regional service or reduces the subsidy we require when we use that service or a bit of both.   

This has been repeated and repeated and repeated. 

It depends on the amount of capital baked into the NEC for the Acela service.  The line was upgraded at significant cost for the Acela service, i.e. electrification of the line from New Haven to Boston, etc.  

The Acela fares are not sufficient to off-set the capital costs of the upgrade.  Until the Acela covers its proportional share of the capital costs (it is not), it is incorrect to say that it is subsidizing the NEC regional fares. Or at least this is the conclusion that most cost accountants would draw. 

Unless Amtrak opened its books to public analysis, which it has not done, a valid accounting analysis cannot be performed.  

A bigger factor in reducing NEC regional train fares, I suspect, is the competition, especially from buses and cars.  Wannabe travelers from Philadelphia to New York, for example, can take a Bolt Bus for about half of what it costs to go by train.  Train devotees may not take a bus, but apparently plenty of people are doing so.  Bolt is probably making money; it is adding services throughout the Northeast. Unlike Amtrak, it is an investor owned business.  It covers its costs or goes out of business.  What a novel idea.   

[daveklepper]

The logical argument has been presented on this thread innumerable times, but you simply seem rather deaf to its statement.   The bottom line is that the Acela Service reduces and does not increase the overall subsidy of the NEC.   Any accounting annalysis will prove this.   The Acela service either reduces the ticket price you and I pay for NE Regional service or reduces the subsidy we require when we use that service or a bit of both.   It also performs a useful function by taking cars off overcrowded highways (sure possibly less than 1% on I-95, but every bit helps) and reduces the need for airport and highway land-taking for further expansion.

This has been repeated and repeated and repeated.

Whether it is subsidized or not is more a matter of semantics than fact.   When you drive your personal automotible you are being subsidized by your state's citizens and by your fellow USA citizens.   The fact that a Cadillac driver is also subsidized should not disturb you.   You would pay more for your Chevrolet or Ford when you bought it if Cadillacs and Lincolns had not also been sold.

[Anonymous]

daveklepper

ACELA:   The bottom line is that the Acela service reduces the overall subsidy needed for the NEC and so in a sence is "profitable" even if all services are subsidized if capital costs are included. 

Without the ability to look at Amtrak's books in depth, as well as the other railroads with a stake in the NEC, there is no way to verify the assertion that the Acela service reduces the overall subsidy needed for the NEC.  

It is unlikely that Amtrak would have made the large capital investments in the NEC had it not been for the Acela.  However, at the end of the day, no one can know for sure, because no one ran a parallel universe to determine the costs of the alternatives.  One thing is certain, however.  The NEC does not cover its capital costs out of the fare box. 

[daveklepper]

PATH:  The new cars do speed loading and unloading and can result in faster schedules and more service when all are in service.   The articulated Electroliners had zero trouble with CTA/CRT sharp curves, and that shows a long articulated car can be run around PATH curves which are no sharper that CTA's.  The clearance restrictions are also similar.   The new cars have less seating capacity and PATH has gone from an mixture of facing and backward and side seats to all  (bowling alley) side seating, thus reducing comfort for off-peak passengers, since more people have to stand.   What I would do is use the center doors on each cars only during heavy traffice and have fold-down seats from panels each side of the center doors to provide additional seating during light traffic periods.

The idea of hostlers at Newark is precisely so there is a motorman (engineer) at each end of the train between the Newark station platforms and the stub-end double track pocket.  Now, a four-minute headway is the minimum, because it takes time for the engineer on each train to wal the length of the train to reverse ends.  The headway could be reduced to two minutes or possibly even 90 seconds, by having an engineer at each end.   One train at a time through the X crossovers being the limitation.  (Even that problem could be solved by a flyowver track, but that costs money.)  But hostlers would be required, since it would be uneconomical for having the second engineer go all the way to WTC or Herald Square.   The engineer and conductor of the arriving train at Newark would to downstairs and take over the next arriving train from the pocket tracks west of the staton.   The two hostlers would go upstairs and board the next arriving train from Manhattan.

ACELA:   The bottom line is that the Acela service reduces the overall subsidy needed for the NEC and so in a sence is "profitable" even if all services are subsidized if capital costs are included.

[aegrotatio]

I'm curious if the new PATH trains are better with the new door configuration.  They sure look like they are easier for many people to board and alight than the old cars are.

 

 

[dakotafred]

Thank you, henry.

[henry6]

dakotafred

Some on here have sounded as if Acela is a guest on Amtrak rails. I thought Acela was simply a faster Amtrak service. Am I wrong?

 

An interesting interpertation...but you are right...Acela is an Amtrak service.  It is a novel idea  in this age of investment banking mentality, provide a service that fits your business.  But don't let my sarcasim scare you off.  I really think there is disbelief that people with money, whether business class or whatever, do have money and will spend it because they want what money will buy.  It just takes a lot to offer such serface....

....and, yeah, not all riders of Acela are on business expense accounts.  But neither do all business people dress in three piece suits with white shirt and tie, either. Going into car dealerships of late and I can't figure out who is the mechanic and who is the salesman!  Business owners of all kinds never with a shirt and tie, but jeans and tee shirts! 

This is another reason why I can say we've got to stop thinking of what has been and what is and start thinking in new terms and building a new transportation system from scratch.

[dakotafred]

Some on here have sounded as if Acela is a guest on Amtrak rails. I thought Acela was simply a faster Amtrak service. Am I wrong?

[aegrotatio]

Umm, well, slow down.  I ride Acela and it's not wall-to-wall suits.  Plenty of regular people ride Acela between WAS and NYP.

And, everything that was done to improve the infrastructure for Acela has directly benefitted all other trains, from Northeast Regional (which exceeds original Metroliner speeds, by the way) and commuter, from track integrity, reliability, and dispatch.

Does the OP actually ride the Acela?

 

 

[HarveyK400]

CSSHEGEWISCH

PATH has short cars for the same reason that CTA has short cars, there are several curves that can't handle long cars.  The same tight curves preclude the use of diaphragms between cars, North Shore tried it with their Silverliner rebuilds but thay had to be pinned back when operating on the L.

It's the overall length of a "longer" articulated car for PATH that is proposed, like the 97' 3-unit articulated cars of the CTA.  I really don't know how effective articulated cars would be in allowing passengers on board to migrate to the ends of a crowded train.  Each multi-unit car would need to be half the train length, ~175', which works out to about 5 sections.

Perhaps more effective would be to have a mix of stations with center and end platform stairs/escalators with both at WTC to distribute boarding and alighting.

Newark has tail tracks to reverse PATH trains expeditiously; but I'm not familiar with the operation.

Henry6 made some suggestions that seem worth exploring, albeit requiring another tunnel.

[henry6]

Yes, the 90 degree curves (I exaggerate a little) is a problem for PATH and I would think articulated cars would't be able to take the turns, especially the short S and double reverses unless made of rubber from end to end.  And I understand the signalling is getting an upgrade.  Of course I think PATH in terms of Hoboken but from Grove Street west to Newark it is a different railroad with fewer and less tight curves...so maybe a longer articulated car could be used Newark to Downtown.  I'm not sure a hostler would necessarily speed things for return trips at Newark because the trains would still have to go to the far west end and return.  Unfortunately the wesbound and the eastbound terminal tracks are at different levels, so stub end and reversing is out of the question.  (It is interesting to note that on the weekend service Journal Square to Hoboken to 33rd St to Hoboken to Journal Square there is an engineer at each end of the train as the route is into stub end terminals at Hoboken and 33rd St and with the crowd there is not enough time for the motorman to walk the length of the train for turnaround!) The current signal system of short  and overlapping blocks (some as short as a car length where speeds are slow) is based on short cars, too.  During rush hours trains often run on the markers or at least with at least one train in sight ahead.  Longer trains won't do it because of the platform lengths which also might preclude the use of longer articulated cars if only because nothing could be gained.

Perhaps extending the 33rd St line north and west to terminate at Secaucus Jct, (See the 7 train plan) or even then continuing on from SJ back to Journal Sq. via the old Marion Jct. might be of help (running in a continuous loop or to Newark).  One of the things PATH cannot do is make an up and downtown trip easy.  Its fares are lower than the subway and thus takes away from subway patronage.  That's why one has to change trains somewhere along the line (Hoboken, Grove St.,, or Journal Square) if going from 33rd St to WTC or vice versa).  In short I think the way to ease congestion and speed up service for PATH is not in the car sizes, an probabley not much in increasing speeds either, but in expanding and duplcating or augmenting routes.

[CSSHEGEWISCH]

PATH has short cars for the same reason that CTA has short cars, there are several curves that can't handle long cars.  The same tight curves preclude the use of diaphragms between cars, North Shore tried it with their Silverliner rebuilds but thay had to be pinned back when operating on the L.

[daveklepper]

PATH can increase capacity as follows:

Use a hostler system at Newark for running trains to the pocket tracks with the road engineers dropping off at Newark Station, to halve the headway betweet trains between Journal Square and Newark, and then run through Herald Square service as well as WTC service.   They are planning to upgrade the signal system, and if the same standards are used system-wide, there should then be no other problem.

A lot of short cars are uneconomic for maximum loading.   Because with passenger unable to move between cars, trains are loaded unevenly, and there can be lots of room in end cars with center of train cars packed to capacity.   Many overseas rapid transit lines have learned and applied this lesson.  Madrid, for one.  I think PATH should be using long multi-section articulated cars,  with one or two mutli-car units for the entire train, instead of a lot of small cars.   It would be possible to take the existing shells and components of the latest equpment and rebuild them.   The riding quality would improve also.

And at least for the WTC-Newark service, longer platforms and longer trains.

[HarveyK400]

It's going to be a few years before any new tunnels are opened.  It'd be great if PATH can improve capacity beyond what it already accomplishes; otherwise a question of priorities remains for Penn Station.  A comment was made that something was in the works to lengthen some platforms.

CUS and LAUPT face problems too; but those should be separate threads.

[henry6]

It wouild be difficult to make better use of the PATH tunnels under any circumstances mainly because of the trolley car curves, reverse curves, and turnouts.  The only cars that will fit are the short cars designed for the service, no other car from another route source would fit.  And, during rush hour, PATH runs to capacity with a short block signal system and the motormen virtually reading the letters on the markers of the train ahead.  So that leave only one two things left: twin bores for at least two tracks if not four, for heavy rail equipment.  And while everything runs toward Penn Station (or GCT from the north and the new LI approach to GCT), I often ponder a heavy rail tunnel from Hoboken-Jersey City to downtown Manhatten through to perhaps a LIRR connection at Flatbush and Atlantic or over to Fresh Pond.  It would alleviate a lot of congestion at Penn for both NJT and LIRR for starters.

[daveklepper]

Downtown to downtown one-seat rides are essential to hold the intercity short-destance corridor market.  That is a given.   The Illinois Terminal sure found out that in a hurry when their new streamliners could not enter downtown Peoria.  The PRR spent a whale of a lot of money so its intercity trains could enter NY, but most of its commuter passengers still went to Exchange Place, Jersey City and enjoyed the ferry boat ride or a transfer to the Hudson and Manhattan, today's PATH to reach Manhattan.   Rush hour commuter service from New Jersey into Penn Station Manhattan increased as intercity trains decreased, as a way for PRR to cut out the expense of ferry boats and the Exchange Place terminal and passsenger yard  and locomotive facilities.  Commuters are more likely to put up with changes than corridor business riders.   The tradition of going to Manhattan and going to San Frfancisco by a ferry boat at the end of a train ride is an old one.  Most residents of Staten Island that work in Manhattan do it today, even arriving by bus at the Ferry terminal and even though there is express bus service to Manhattan.

My solution to the Hudson River tunel capacity problem is to make better use of the four existing PATH tunnels, and I have already make some suggestions to PATH.   (They did implement certain other suggestion which were provided on a professional basis.)

[HarveyK400]

henry6

Oltman...if you are doing single ride fares for Acela and Regional, then you must compare to single ride fares on NJT, too.  But.  I don't understand the point here anymore.  So what if one service subsidizes another?  In retailing it is done all the time..Supermarkets.  They.sell lots of bolongna at a cheap price and sell the bread at full price; sell potato chips and pretzels with lots of salt so you can buy high fructose drinks; if you sell speghetti, you better sell speghettii sauce, too.  And you sell 89 cent per pound speghetti and  89 cent sauces plus 2 buck a pound speghetti and 4 bucks a jar sauce for the gourmands.  Whats the problem here?.   Business should be in business to make money by giving service or goods at a price people are willing to pay.

I'm trying to get at something beyond the business aspect of setting fares, namely the best use for the public of a piece of critical infrastructure.  Irrespective of private or public ownership the Hudson tunnels and Penn Station are infrastructure critical to the public.  What would be the best use, Amtrak or all-NJT in the peaks, if push comes to shove, especially without the new tunnels and assuming a growing demand and desire for access to Manhattan from New Jersey?  For instance, if one NJT train in the Acela slot would shuttle all Amtrak riders to connect with trains at Newark, the Regional and Keystone slots could be turned over to NJT for an additional 2,500-plus commuters equivalent to another highway tunnel lane.

[daveklepper]

1.   In comparing fares for the purposes of looking at the subsidy question one looks at the fares that most riders use for each service.   Thus it is entirely appropriate to compare single Acela fares with monthly pass commuter fares.

2.   Amtrak owns the Hudson River tunnels and the line to Washington also used by NJTransit.  The East River tunnels are half Amtrak and half LIRR, but they are dispatched for the best flow of traffic regardless of ownership, although most traffic does use the owned tunnels because of the platform arrangements at Penn Station.

3.   Metro North owns the lines from Grand Central Terminal to both Poughkeepsie and to the NY-Connecticut State Line.   Connecticut DOT from the State Line to east of New Haven Station.   Amtrak is a tenant from Spuyten Dyvel (sp?) to Poughkeepsie and from New Rochelle to New Haven.

[schlimm]

So why should Amtrak get pushed off their own tracks during the prime times for Acela use?  Anyway, I was under the impression that Metro North, NJT and ConnDOT trains mostly used different tracks than the Amtrak trains.

[henry6]

Amtrak, yes.  Commuter agencies from D.C. to Boston use the tracks.

[schlimm]

henry:  I agree, this thread is getting silly.  If some folks care to pay for more deluxe and faster service, what of it?  BTW, who owns the tracks in Penn Station and on down the line to Washington?  Amtrak?

[henry6]

Oltman...if you are doing single ride fares for Acela and Regional, then you must compare to single ride fares on NJT, too.  But.  I don't understand the point here anymore.  So what if one service subsidizes another?  In retailing it is done all the time..Supermarkets.  They.sell lots of bolongna at a cheap price and sell the bread at full price; sell potato chips and pretzels with lots of salt so you can buy high fructose drinks; if you sell speghetti, you better sell speghettii sauce, too.  And you sell 89 cent per pound speghetti and  89 cent sauces plus 2 buck a pound speghetti and 4 bucks a jar sauce for the gourmands.  Whats the problem here?.   Business should be in business to make money by giving service or goods at a price people are willing to pay.

[oltmannd]

daveklepper

Oltmannd:   Which Acela fare, lowest or highest?   Regular or business/1st class?

Typical same day peak fare.  If you want to compare commuter with Acela, rush hour fares apply.  Acela fare was bus. class.  Regional was coach.  NJT was monthly pass and 20 RT a month.

[schlimm]

HarveyK400

 

 

 

Some food for thought:

The question is whether, for roughly the same revenue, it is better to carry more passengers on NJT or accommodate the privileged on Acela with the limited capacity?

If the revenue per train comes in about the same, wouldn't NJT almost be profitable as well?

Not so sure if revenue per train is actually close to equal (and to determine those numbers is beyond me).  Remember, riders on NJT are paying about the same per mile, while on Acela there is a wide range. On the 25th, a rider on the 7:00 am Acela using first class pays a whopping $314.00 one way ($1.39 per mile).   But folks are willing to pay.

Anyway, if the new configuration at Penn allows for more capacity at rush hour (more tracks or at least a quicker turnaround?), maybe both can coexist, even at peak times in the morning and afternoon?

[Paul of Covington]

   'Round and 'round we go, and...

    These subsidy debates can go on forever.    Let's agree that we all subsidize each other every day, both through government action and our own business choices.    Those without children or who send their children to private school subsidize those who send them to public school.    City property owners who do not own cars have a large part of their property taxes go to streets and traffic control.   "Free" parking is subsidized by non-drivers who shop at businesses with "free" parking.   Any product purchased that's made in USA was probably made in a factory that half a century or so ago moved outside of town and purchased enough land to build and maintain parking facilities.     Those who use the drive-thru window at fast food places are subsidizing those who eat inside: the owner has the expense of utilities, clean-up and trash collection and disposal.    The 100-lb woman on an airline flight pays the same fare as the 250-lb man.    We can go on forever.

    As for what subsidies are justified, that's easy.   If it benefits me, it's a worthy investment; if it benefits you, it's a boondoggle,

[HarveyK400]

schlimm

The Acela fares from Oltmannd and myself depend on day and time of day.  The ones I sampled were for April 25 and were coach.

Details.  Some food for thought:

The question is whether, for roughly the same revenue, it is better to carry more passengers on NJT or accommodate the privileged on Acela with the limited capacity?

If the revenue per train comes in about the same, wouldn't NJT almost be profitable as well?

[schlimm]

The Acela fares from Oltmannd and myself depend on day and time of day.  The ones I sampled were for April 25 and were coach.

[daveklepper]

Oltmannd:   Which Acela fare, lowest or highest?   Regular or business/1st class?

[Falcon48]

Sam1

Oh, c'mon is a put down.  It is an insult.  It adds no value.    

Claiming that an issue is phoney implies that a contributor lacks the intellectual skills or knowledge to analyze data and formulate an issue.

Another put down is to say that a person does not understand the point, especially when the accuser does not offer any verifiable data to refute the person's point of view.  If you disagree with a point of view, show your point of view with logic and verifiable data.  Belittling a contributor adds not value.   

Inflamatory words to put down or attempt to put down a point of view don't belong in these forums.  Or in any other discussion for that matter.  

I think that your latest post far transcends anything you have accused me of doing.  I also note, in reviewing this thread, that I'm not the only one who disagreed with your point of view that you've accused of forum misconduct.  But it doesn't matter.  I don't intend to post anything else on this topic.

[HarveyK400]

oltmannd

 

daveklepper:

 

Commuter fares, for most of the passengers (who ride on monthly tickets), are more like one tenth of the fare on a mileage basis as compared with the average Acela fare.   Check it out!

 

 

NJT montly pass on NEC ~20 cents per mile

Acela NYP-WAS ~90 cents per mile

Amtrak Regional NYP-WAS ~50 cents per mile

 

I tried.  Had to sign up for a program, got to complicated, and messed up my e-mail uninstalling. 

Glad to see oltmannd came up with the info - not too far from my 3x shot in the dark.

[henry6]

Yes. Amtrak works on a market driven fare plan...the earlier you book the cheaper it is; the closer to train time, the less space available, the higher the fare.  But there are time of day differences and day of week differences built into the system, too.

[schlimm]

A random look at Amtrak for two weeks out, April 25, shows quite a range of fares: NE Regional as cheap as 22 cents per mile; Acela as cheap as 62 cents per mile.  It all depends on time of day, day of the week and how far in advance.

[henry6]

Apples to oranges comparison on service, though...Acela is orange, Regional is tangerine, NJT is apple.

[oltmannd]

daveklepper

Commuter fares, for most of the passengers (who ride on monthly tickets), are more like one tenth of the fare on a mileage basis as compared with the average Acela fare.   Check it out!

NJT montly pass on NEC ~20 cents per mile

Acela NYP-WAS ~90 cents per mile

Amtrak Regional NYP-WAS ~50 cents per mile

[henry6]

300 passengers for a non commuter train is average....probably from the beginning of time, too.  Not all mainline or inter city trains carried much more than that.  So, there is no problem there....a Regional on the same route probably has capacity for 500 but carries up to 700 different passengers enroute.  And comparing commuter trains and services to long distance and inter city services in terms of consits, equipment, and fares is the proverbial apples and oranges.  The equipment is different, the scheduled spacing is different, the travel distances are different, the whole service philosophy is different.

[daveklepper]

Commuter fares, for most of the passengers (who ride on monthly tickets), are more like one tenth of the fare on a mileage basis as compared with the average Acela fare.   Check it out!

[HarveyK400]

Acelas, Regionals, and Keystones run hourly through the rush hours (8a-10a, 5p-7p); and longer-distance trains using the NEC to New York, Washington, or Boston generally arrive and depart outside the rush hours.

It's a good thing Acela is profitable; because otherwise it's a waste of space for just 300 passengers compared to over 1,000 each for NJT and LIRR out of Penn Station in the peaks.  It's understandable that, given the comparatively smaller loads on Amtrak, only 3 of 42 peak hour slots are allotted to Amtrak.  NEC services are limited by suburban services in six areas.

Carrying three times the passengers, a commuter train should be close to profitable to operate at a third of the fare.

[henry6]

Acela seems to be a success because it is supplying that premium service you say is lacking.  It must be a marketing success so one train during "rush hour" must be ok.  But, too, what rush hour?  Morning or afteroon/  Hour or hours?  To where?  To Boston, MNRR and CONDOT have more to say because of their ownership of the track.  To D.C., NJT, SEPTA, and MARC have a lot to say, too.  It may infact be imossible to get a 125 mph train woven through the traffic between 6AM and 9AM and again from 4PM to 7PM, so why bother trying.  It has a good chance of being a failure, so why tarnish the image\?

[HarveyK400]

One factor that seems to be missing in the ability of Acela to attract a premium clientel is the scarcity, constrained supply, of premium service.  Imagine 40-some trains out of Penn Station in the rush hour and only one Acela.

[blue streak 1]

daveklepper

In a very  real sense the Acela rider subsidizes the rider on regional and commuter trains.   (The latter get the greatest subsidy, getting one from state and local governments as well as via Amtrak from the USA tax payer.)

Good point. Thinking of NJ Transit and the NEC is a great example. NYP to Trenton upgrades will help travel times. 

The costs of improving the NEC were and are do to years of deferred maintenance and lack of capital expendituires.   If you're going to spend money to replace 80-year-old catenary, having it equipped for 150mph instead of 125 in a drop in the bucket compared to the total cost.   Much is the same for track structure and much else. 

The upgrade of the NEC will certainly reduce the cost of ongoing maintenance. Bet even the rolling stock maintenance will  be reduced. 

If Amtrak gets the improvement funds grant request just announced the total number of passenger minutes saved will be a rather large number.

[Anonymous]

Oh, c'mon is a put down.  It is an insult.  It adds no value.    

Claiming that an issue is phoney implies that a contributor lacks the intellectual skills or knowledge to analyze data and formulate an issue.

Another put down is to say that a person does not understand the point, especially when the accuser does not offer any verifiable data to refute the person's point of view.  If you disagree with a point of view, show your point of view with logic and verifiable data.  Belittling a contributor adds not value.   

Inflamatory words to put down or attempt to put down a point of view don't belong in these forums.  Or in any other discussion for that matter.  

[Anonymous]

[quote user="schlimm"]

Dave: Precisely!  This is a phony issue about Acela and subsidies by business travelers through tax deductions.  Rather than attack Acela, which as you point out, covers its own operating expenses and allows the entire NEC to operate with a profit, perhaps tax deductions for business travel should be eliminated, along with first class. [quote]

The Acela covers its own operating costs because it gets premium fares from people who are traveling in many instances on some else's nickel.  My initial point is that the subsidy is the difference between a coach fare and the premium fares (first class and business class).  I am not arguing that normal and necessary business espenses are not deductable.  The IRS allows businesses to deduct business class fares.  The deductability of first class fares depends on the circumstances. 

Business class and first class fares should not be passed through to customers, clients, taxpayers, etc., and they should not be deductable on a corporate or business tax return. 

I worked in Australia for nearly five years.  And I traveled there on business for more than 10 years.  The first couple of trips were in business class, which was company policy.  Then, one day, I asked how much it cost to fly from Dallas to Melbourne, Australia in business class.  It was $8,500 compared to a coach fare of $1,600.  I switched to coach travel.  I could not then nor can I see the justification in sticking the rates payers, many of whom live below the poverty line or just above it, with a premium fare.  And it is the rate payers who ultimately picked-up the tab.  I am in the minority.  I know it.  Being in the majority, however, does not make it right. 

In another post asertions are made that the creature comforts on the Acela justify the premium fares.    Difficult to substantiate!

The Acela service covers its operating costs before interest and depreciation.  It does not cover the fully allocated capital costs.  The remaining trains on the NEC don't cover their operating costs, although they did in FY08.  However, they were only able to do so because Amtrak had a different cost accounting system.  Under the current cost accounting model, if they restated the results for 2008, the other NEC trains would have lost money.

In FY10 Amtrak's annual depreciation was $593.1 million and interest expense was $135.5 million, bringing unallocated depreciation and interest to $728.6 million.  How much of this amount is worn by the NEC?  Amtrak does not tell us in its public financial statements.  However, it spent billions  upgrading of the NEC over the past 10 to 15 years and, therefore, the bulk of it is allocable to the NEC, i.e. equipment, infrastructure upgrade to accomodate higher speeds, extension of the wires to Boston, etc.

A conservative estimate of the depreciation and interest allocable to the NEC is 75 per cent.  If one accepts this estimate, $546.5 million belongs to the NEC.  How much is attributable to the Acela?   Without being able to look at Amtrak's property accounting ledgers, it is difficult to say.  However, it is difficult to believe that the capital improvements that were made to the NEC, especially the electrification of the line from New Have to South Station, would have been made if it had not been for the Acela. 

In FY10 the Acela generated approximately 50 per cent of the revenues on the NEC.  If we assign half of the interest and depreciation to the Acela, which had an operating profit of approximately $100.6 million in FY10 (latest audited numbers), it means the Acela lost $172.6 million on a fully allocated cost basis.  If we assign 75 per cent of the capital improvements to the Acela, the fully allocated loss would be $309.2 million, which is not far off from the figure that Fred Frailey offered up, although I don't know where he got his numbers.  And this is for a premium service.

Amtrak pays no taxes, i.e. fuel taxes, real estate taxes, sales taxes, income taxes, excise taxes, etc.  If it had to pay taxes, the loss on the Acela would be even greater, as well as its system wide operations, would be even greater.     

[schlimm]

Dave: Precisely!  This is a phony issue about Acela and subsidies by business travelers through tax deductions.  Rather than attack Acela, which as you point out, covers its own operating expenses and allows the entire NEC to operate with a profit, perhaps tax deductions for business travel should be eliminated, along with first class.

[daveklepper]

Acela should not be a wipping boy for subsidies or for anything else.

 

If I am reimbursed for an Acela fare by my employer, it is because the employer and thus his customrer receive value  in my improved productivity from the absence of hassel and the superior speed of the service Amtrak's Acela gives me.

 

On an incremental basis, out-of-pocket plus capital and maintenance costs, Acela makes a profit and requires no subsidy.   What I mean by this is that if Acela were discontiniued, the subsidy for the rest of the services provided on the NEC would have to increase greatly or ticket prices would have to increase greatly or some combination of both.   In a very  real sense the Acela rider subsidizes the rider on regional and commuter trains.   (The latter get the greatest subsidy, getting one from state and local governments as well as via Amtrak from the USA tax payer.)

 

The costs of improving the NEC were and are do to years of deferred maintenance and lack of capital expendituires.   If you're going to spend money to replace 80-year-old catenary, having it equipped for 150mph instead of 125 in a drop in the bucket compared to the total cost.   Much is the same for track structure and much else.   In can be arued that a tilting train causes far less outside rail wear on curves than regular equipment.

 

The analogy with the Cadillac owner and the Chevy owner is a good one.   And of course passenger intercity rail could be a private industry of highway transportion was not so heavily subsidized.

[Falcon48]

Sam1

 

 

 

 ". 

 

 

Its a subsidy to the user in  some instances.  And it is a subsidy for the service provider in that the service would not otherwise be sustainable.  

The tax code is a political document.  It enhances or restricts certain activities.  The word subsidy does not appear in the code.  It is a matter of substance over form.  But when deductions are restricted, it is because politician have concluded that they are unfair and serve no societal purpose.  Call them what you want, the ability to deduct premium transport fares, such as those charged by the Acela services, benefits the rider, who for the most part is passing the cost through to the end users, and it benefits Amtrak.  If people don't like the term subsidy, try enabler. 

The tax benefits for home ownership in the U.S. benefit the owners.  They also benefit builders and sellers in that they can build bigger, pricier houses, which tend to be more profitable than smaller, less featured houses.  I used this illustration because it is an analogy that most people can relate to.  It is also one that causes most people to get torqued up because it hits home.  One man's subsidy is another man's vital investment.

Being allowed to deduct the cost of an Acela fare (I never claimed otherwise) for expense account riders enables Amtrak to offer a premium service that otherwise it could not do.  True, the rider benefits, but so too does Amtrak.  In my mind it is a form of subsidy, although different in form than the direct subsidy Amtrak receives from the government. 

I am not arguing that ordinary and necessary expenses are not a legitimate business deduction.  Tthis is the guiding principle of the IRS Tax Code.  But if expenses are above and beyond ordinary and necessary, they are not deductable.  Business class is deductable because it is classified as ordinary and necessary, although like many things in the tax code, I believe that is a stretch. 

Using all capital letters or bold letters in emails, forums, etc. is considered to be shouting.  There are several guides for on-line etiquette that deal with the issue in great length.

Oh, c'mon.  There was nothing in my response which was insulting or demeaning (and, if you've read my other posts, I never insult people).  I've been writing business and personal E-Mails for decades.  On occasion, I think it's useful to emphasize particular words when they are important to a concept.  In the case of my response to your post, those words related to the issue who was being subsidized.  My normal way of doing this is by italicization.  But, that doesn't seem to work on this website (or, at least, I can't figure out how to make it work, given my level of computer skills), so I have to resort to capitalization.  Perhaps I shouldn't have emphasized the word "nothing" so, if that offended you, I apologize. 

[henry6]

You're right., Paul.  The whole thing has gone on so long that you can say anything and actually be half right and half wrong depending on who hears the message.  So all arguments thus become meaningless.  What does have meaning is where do we go from here.  I've got a 4 year old car with 58,000 miles on it, I live in a rural area, and use the car for visiting clients as well as for recreation.  I am 68 yrs. old.  If I had a reliable rail service to take me where I want to go and when I want to go, I might use it.  But lets take a 21 year old starting out.  If we provide him with a train service that he could use at a price that would eliminate his need to purchase as few as 5 and as many as 30 automobiles in his lifetime, saving purchase, licensing, parking, maintaining, and other user costs in that time, it might be in his best interest to have rail service.  For me at my age new service vs my automobile doesn't make as much sense.  So what we've got to do is draw a line and mark a spot from where we start planning and building a transportation system that serves.

[Paul Milenkovic]

I kinda don't buy the argument anymore about the true costs of road transportation being hidden from view and hence we are pouring gobnormous amounts of government money into highways and that if trains and transit somewho had their fair share of all of this that we would have this world-class train system.

Yeah, yeah, the cost-comparisons of the anti-train contingent are conducted through the lens of a general point of view on the subject, but the cost figures of the train contingent, in attributing every possible and imaginable indirect cost to road transport are equally suspect.

For example, Madison Metro (local bus company) has a big fat sign on the buses saying that the cost of auto commuting is $9000/year and the cost of Madison Metro, based on a certain multi-ride fare plan, is something like $600/year.

You can easily spend $9000/year if you lease, insure, put gas in, and park a late model car.  But to ascribe that entire expense to commuting?  When the average trip length on Metro is about 3-4 miles?  If you are travelling 3-4 miles each day to work, and that is the only thing you use the car for, you can drive some clunker and find a local mechanic who can keep that puppy running.  You know, kind of like a train station car that people keep who have to drive to a suburban station and then take the Metra train into downtown Chicago.  This $9000/year comparison may make a point, and it is easy to spend that much on a not-even-that-fancy car if you are buying new and leasing, but it is a bit of a stretch and an exageration in the context of the bus company being your second car.

Whether building a train line is cheaper than adding highway lanes also depends.  With the exception of the NEC and maybe the Pacific Surfliner, the corridor trains services cost much, much less than highway lanes but they serve much, much less than the capacity of even one highway lane in each direction.

As to the gas tax as a user fee and the cross-subsidization that goes on, yeah, yeah, the rural roads are cross subsidized, and the Interstate is cross subsidized.  If the Interstate were not cross subsidized, it would have to charge substantial, tolls!  Like the Illinois, Indiana, Ohio, Pennsylvania, New York, New Jersey, and now Florida and Texas toll roads.

So the argument is let's build a nationwide network of HSR corridors.  Let's call it Interstate II or the Steel Interstate or some such thing.  Why not have gas tax pay for it just as gas tax pays for Interstate I?

I mean why not?  Why don't we just levy another gas tax increment, pay for and build HSR, and instead of driving door-to-door, you would (I guess) drive (and park) at the HSR station, be whisked along on the HSR, and then get a ride (or rent a car) at the other end.  We do that with airplanes, don't we?

For one thing, it depends on what the non-railfan non-passenger advocate people out there want to do.  If you would rather your gas tax money go towards a multi-modal auto-HSR-somethingattheotherend mode instead of door-to-door auto, I guess that is a choice we have to make through a political process.  But we would need to persuade people other than passenger advocates and railfans that trains are kewl.  And we shouldn't get mad at people if that is not what they want to do.  I think we should advocate and persuade and not scold -- that bus banner borders on a scold, as much as saying look dummy, how much money is flying out the window because you want to drive as if you couldn't budget your auto expenses and whether you could afford a car against whether you want to travel to work on a bus in close fellowship with your fellow Madisonians.

[henry6]

We pay taxes of all kinds and never really get a "direct benefit".  I pay school taxes though me, my wife, and son have long since graduated out of the system and my son, his wife and grandchildren live in another state.  Other taxes go for state highways not just outside my door, but hundreds of miles in many directions away from where I sit.  There is an old saying about if your in for a nickle, your in for a dime.  So, if you are a citizen of a town, county, state, for country, you are a citizen or your not.

[cx500]

Sam1

 

In Texas' major cities, the legislature has authorized the collection of a dedicated sales tax to fund public transit.  These taxes are collected from everyone, most of whom drive and very few who use public transit.  In addition, two cents of the of the federal fuel tax is transferred to the Mass Transit Administration, which flows the funds to a variety of mass or public transit projects around the nation.  In this manner, motorists are subsidizing public transit and not the other way around. 

Let's look at this issue from another perspective.  How much would it be worth to a typical person driving into work to have his commute 20 minutes faster each way, say 40 minutes instead of an hour, twice a day.  This can be accomplished by either:

1) building extra lanes and roads to reduce the congestion; or

2) removing enough automobiles that the congestion is greatly reduced.

The free market would say to go with the cheaper option, which in some cases may be attractive public transit.  Note that  the remaining motorists are primary beneficiaries, so it is quite appropriate that they share in the costs of that benefit.

Now I will admit  rural drivers will see little or no benefit since they don't have traffic congestion problems (except when they drive into the big city to shop, visit or whatever).  On the other hand, their local highways have probably been subsidized to a considerable extent by the urban taxpayers.

There are other ways of reducing the automobile use besides public transportation.   Working from home (telecommuting) will be challenged to happen in large enough numbers to have real effect.  Enforced car-pooling may be resisted, but perhaps the next spike in gas prices will encourage voluntary arrangements.

I think we are in general agreement that one of the problems is the true costs of road transportation are hidden from view, and for most people,<out of sight> equals <out of mind>.

John

[henry6]

But I though that's why we had in lawys, spouses and children...especially teenagers!

[Anonymous]

henry6

It's not issues being confused but words being construed and misconstrued.  Subisdy is a direct payment from one entity to another not to purchase but to support.  A tax is a charge usually from a government or its agent to a private individual or corporation to raise money.  There is where the deliniation is. The government can take the tax monies received and pay its bills or give it as a subsidy to a given entity in the form of contsturction, tax break, land, bonds, dollars or any other way.  The quibbling here over minutia and rhetoric is distracting from the original postulations.  Stop mincing, misusing, and redefining words.

It is in the eyes of the beholder.  Humans have been word smithing since they learned to speak.  And they will do so until the end of time.  Really, Henry, if everyone agreed on a subject or the words associated with it, without a bit a hair splitting, would these forums be any fun?

[henry6]

It's not issues being confused but words being construed and misconstrued.  Subisdy is a direct payment from one entity to another not to purchase but to support.  A tax is a charge usually from a government or its agent to a private individual or corporation to raise money.  There is where the deliniation is. The government can take the tax monies received and pay its bills or give it as a subsidy to a given entity in the form of contsturction, tax break, land, bonds, dollars or any other way.  The quibbling here over minutia and rhetoric is distracting from the original postulations.  Stop mincing, misusing, and redefining words.

[Anonymous]

cx500

Sam1:

Roads do not pay for themselves.  The users pay for them through fuel taxes, excise taxes, sales taxes, fees, and property taxes.  Unfortunately, because of the deceptive way the revenues are collected, most motorists don't see the full cost of building and maintaining the country's roads at the pump.  But they pay for them.

 

Excuse me, but is not using property taxes to pay for roads an outright subsidy?  Many take advantage of the subsidy to drive to work.  That subsidy has become so widely accepted that very few recognize it for what it is.  The deception has worked, and those who might prefer their property tax to used for better (or any) public transportation service are mocked.  The money goes to add lanes or build a new interchange instead.

Very little if any fuel taxes filter back to help maintain local roads.  And the sales taxes on vehicle purchases and maintenance won't add up to very much either.  Using sales tax on my shoes to repave the local main street is subsidizing a competing mode of transportation.

John

Who pays the property taxes?  In the United States the nearly 114 million licensed drivers pay them irrespective of whether they own property or rent.  The only motorists who do not pay property taxes, a portion of which are used to build and maintain local streets and county roads, are those who live in public housing.  And not many motorists in Texas reside in public housing, although there are some.

The problem with funding local streets and county roads through the property tax, as I have said, is it hides the true cost of driving.  For this reason, I would like to see the politicians pass the cost of local streets and county roads through to motorists at the pump, with a corresponding reduction in property taxes.  It is not likely to happen.

In Texas' major cities, the legislature has authorized the collection of a dedicated sales tax to fund public transit.  These taxes are collected from everyone, most of whom drive and very few who use public transit.  In addition, two cents of the of the federal fuel tax is transferred to the Mass Transit Administration, which flows the funds to a variety of mass or public transit projects around the nation.  In this manner, motorists are subsidizing public transit and not the other way around. 

[cx500]

Sam1

Roads do not pay for themselves.  The users pay for them through fuel taxes, excise taxes, sales taxes, fees, and property taxes.  Unfortunately, because of the deceptive way the revenues are collected, most motorists don't see the full cost of building and maintaining the country's roads at the pump.  But they pay for them.

Excuse me, but is not using property taxes to pay for roads an outright subsidy?  Many take advantage of the subsidy to drive to work.  That subsidy has become so widely accepted that very few recognize it for what it is.  The deception has worked, and those who might prefer their property tax to used for better (or any) public transportation service are mocked.  The money goes to add lanes or build a new interchange instead.

Very little if any fuel taxes filter back to help maintain local roads.  And the sales taxes on vehicle purchases and maintenance won't add up to very much either.  Using sales tax on my shoes to repave the local main street is subsidizing a competing mode of transportation.

John

[Anonymous]

Falcon48

 

Sam1:

 

 

 ". 

 

The issue is whether the premium fare that is paid by someone traveling on an expense account is a subsidy to the carrier or vendor.  As I noted, it applies equally to any mode of transport, including first class, business class, etc.

Are high priced meals eaten by people on an expense account a subsidy for the restaurants that serve them.  The IRS thinks so.  It is the reason a business cannot deduct more than half of the cost of the meal as a legitimate business expense.  And there is an upper limit on the cost of the meal.  It is the reason why all outside of the box travel, meal, and entertainment expenses are constrained by the tax code.

The Acela service probably would not be possible without people riding on expense accounts.  On the other hand, if the first class and business cabins on the jet liner went away, the airlines would probably do quite nicely, since there would still be plenty of people to fill the seats in the back.  Come to think of it, on Southwest, Jet Blue, etc., there is no first and business classes.  And they appear to be doing OK.

Clearly, what is a subsidy depends on one's views.  As I mentioned, most people really get torqued up when I tell them that the ability to deduct the mortgage interest, property taxes, and capital gains on their homestead on Schedule A and D is really a subsidy.  I guess it depends on whose Ox is being gored.  

 

 

 

You are confusing two entirely different issues

The question of whether a user fee a business traveller pays to the provider of a service (whether rail transportation or hotel accomodations) is tax deductible has NOTHING whatever to do with the issue of whether the fee is a "subsidy" to the service PROVIDER.  The reason IRS does not allow some types or amounts of business expenses to be deducted isn't because IRS considers them to be "subsidies" to the PROVIDERS of the goods or services involved.  It's because IRS does not consider the expenses to be reasonably necessary for the TAXPAYER (that is, the business which INCURRED the expense) to generate its own income, and thus does not allow the TAXPAYER to use the expenses to reduce its taxes.   

The other types of tax deductions you mention (mortgage, property taxes, etc) also have NOTHING to do with this question.    One can legitimately argue whether giving these deductions to a taxpayer is a form of "subsidy".  But, if it is a "subsidy", it is a subsidy to the TAXPAYER which incurred the expenses.  It is not a "subsidy" to the entity which sold the taxpayer a mortagage, or the local govenrment which levied the property tax.  It's also not a "subsidy" to other providers of goods and services, who may make some additional sales because the deductions give the taxpayer more disposible income.   If you start looking at the downstream multiplier effects of every government policy which may influence a buyer's economic decision to purchase a product or service, and label them all as "subsidies" to the product or service providers, then you might as well call everything a "subsidy" and forget about the question. 

Finally, if you are going to use tax deductibility as the criteria for "what is a subsidy", then Acela fares flunk your own test.  To my knowledge, Acela fares for business travel are fully deductible.  

Its a subsidy to the user in  some instances.  And it is a subsidy for the service provider in that the service would not otherwise be sustainable.  

The tax code is a political document.  It enhances or restricts certain activities.  The word subsidy does not appear in the code.  It is a matter of substance over form.  But when deductions are restricted, it is because politician have concluded that they are unfair and serve no societal purpose.  Call them what you want, the ability to deduct premium transport fares, such as those charged by the Acela services, benefits the rider, who for the most part is passing the cost through to the end users, and it benefits Amtrak.  If people don't like the term subsidy, try enabler. 

The tax benefits for home ownership in the U.S. benefit the owners.  They also benefit builders and sellers in that they can build bigger, pricier houses, which tend to be more profitable than smaller, less featured houses.  I used this illustration because it is an analogy that most people can relate to.  It is also one that causes most people to get torqued up because it hits home.  One man's subsidy is another man's vital investment.

Being allowed to deduct the cost of an Acela fare (I never claimed otherwise) for expense account riders enables Amtrak to offer a premium service that otherwise it could not do.  True, the rider benefits, but so too does Amtrak.  In my mind it is a form of subsidy, although different in form than the direct subsidy Amtrak receives from the government. 

I am not arguing that ordinary and necessary expenses are not a legitimate business deduction.  Tthis is the guiding principle of the IRS Tax Code.  But if expenses are above and beyond ordinary and necessary, they are not deductable.  Business class is deductable because it is classified as ordinary and necessary, although like many things in the tax code, I believe that is a stretch. 

Using all capital letters or bold letters in emails, forums, etc. is considered to be shouting.  There are several guides for on-line etiquette that deal with the issue in great length.

[Falcon48]

Sam1

 ". 

The issue is whether the premium fare that is paid by someone traveling on an expense account is a subsidy to the carrier or vendor.  As I noted, it applies equally to any mode of transport, including first class, business class, etc.

Are high priced meals eaten by people on an expense account a subsidy for the restaurants that serve them.  The IRS thinks so.  It is the reason a business cannot deduct more than half of the cost of the meal as a legitimate business expense.  And there is an upper limit on the cost of the meal.  It is the reason why all outside of the box travel, meal, and entertainment expenses are constrained by the tax code.

The Acela service probably would not be possible without people riding on expense accounts.  On the other hand, if the first class and business cabins on the jet liner went away, the airlines would probably do quite nicely, since there would still be plenty of people to fill the seats in the back.  Come to think of it, on Southwest, Jet Blue, etc., there is no first and business classes.  And they appear to be doing OK.

Clearly, what is a subsidy depends on one's views.  As I mentioned, most people really get torqued up when I tell them that the ability to deduct the mortgage interest, property taxes, and capital gains on their homestead on Schedule A and D is really a subsidy.  I guess it depends on whose Ox is being gored.  

 

You are confusing two entirely different issues

The question of whether a user fee a business traveller pays to the provider of a service (whether rail transportation or hotel accomodations) is tax deductible has NOTHING whatever to do with the issue of whether the fee is a "subsidy" to the service PROVIDER.  The reason IRS does not allow some types or amounts of business expenses to be deducted isn't because IRS considers them to be "subsidies" to the PROVIDERS of the goods or services involved.  It's because IRS does not consider the expenses to be reasonably necessary for the TAXPAYER (that is, the business which INCURRED the expense) to generate its own income, and thus does not allow the TAXPAYER to use the expenses to reduce its taxes.   

The other types of tax deductions you mention (mortgage, property taxes, etc) also have NOTHING to do with this question.    One can legitimately argue whether giving these deductions to a taxpayer is a form of "subsidy".  But, if it is a "subsidy", it is a subsidy to the TAXPAYER which incurred the expenses.  It is not a "subsidy" to the entity which sold the taxpayer a mortagage, or the local govenrment which levied the property tax.  It's also not a "subsidy" to other providers of goods and services, who may make some additional sales because the deductions give the taxpayer more disposible income.   If you start looking at the downstream multiplier effects of every government policy which may influence a buyer's economic decision to purchase a product or service, and label them all as "subsidies" to the product or service providers, then you might as well call everything a "subsidy" and forget about the question. 

Finally, if you are going to use tax deductibility as the criteria for "what is a subsidy", then Acela fares flunk your own test.  To my knowledge, Acela fares for business travel are fully deductible.  

[henry6]

I have another question based on marketing.  Could the speed of Acela be marekted without the other amenities and higher fares?  In other words, it it were a regular coach seat with regular long distance meal service, and were priced at regular coach fares, would there be enough demand/use to do better than break even?  Supose the marketing plan was not against the Eastern Shuttle but rather against Greyhound or the family Toyota, could it succeed?

[Anonymous]

Falcon48

In response to Sam1, I don't think it's at all appropriate to treat the "spread" between Acela fares and regional fares as a "subsidy" because the passengers paying them may pass the costs on to their customers or clients.  The same can be said of virtually any expense incurred by a business traveler that's reimbursed by his/her employer.  For example, put that "high level manager" paying the Acela fare on an airplane.  The air fare will be passsed on to customers or clients the same as the rail fare. Why isn't that a "subsidy" to the air lines?  And, based on this theory, why would you distinguish between the regional fare and the Acela fare at all?  After all, if the manager uses a slower regional train and pays the lower fare, that fare will similarly be "passed on" to his/her customers or clients. Further, on the corridor, even the regional fares will likely be higher than Megabus.  Is that "spread" a "subsidy" too? 

And let's not stop with rail fares.   How about cost of the nice hotel room and  meal the manager had while on his/her trip.  Those, too, will be ultimately "passed on" to customers or clients.  Are they "subsidies" to the hotel and the restaurant?.  Or are they "subsidies" only to the extent that the costs exceed the price of a Motel 6 room and a Big Mac.?

The fare actually paid for the service received by the passenger is not a "subsidy", regardless of whether it is "high" or "low", and regardless of whether it is ultimately passed on to customers, clients or strockholders as part of a business' cost or price structure or the value of its shares.  To call user charges like this a "subsidy" would mean all expenses incurred by business people and reimbursed by their employers are "subsidies" to those who provided the goods or services for which they were incurred,  In the case of rail fares, that would mean that the only fares that wouldn't be "subsidies" would be the fares paid by non-business travelers. 

The issue is whether the premium fare that is paid by someone traveling on an expense account is a subsidy to the carrier or vendor.  As I noted, it applies equally to any mode of transport, including first class, business class, etc.

Are high priced meals eaten by people on an expense account a subsidy for the restaurants that serve them.  The IRS thinks so.  It is the reason a business cannot deduct more than half of the cost of the meal as a legitimate business expense.  And there is an upper limit on the cost of the meal.  It is the reason why all outside of the box travel, meal, and entertainment expenses are constrained by the tax code.

The Acela service probably would not be possible without people riding on expense accounts.  On the other hand, if the first class and business cabins on the jet liner went away, the airlines would probably do quite nicely, since there would still be plenty of people to fill the seats in the back.  Come to think of it, on Southwest, Jet Blue, etc., there is no first and business classes.  And they appear to be doing OK.

Clearly, what is a subsidy depends on one's views.  As I mentioned, most people really get torqued up when I tell them that the ability to deduct the mortgage interest, property taxes, and capital gains on their homestead on Schedule A and D is really a subsidy.  I guess it depends on whose Ox is being gored.  

[Anonymous]

schlimm

REA on this thread refers to the New Deal's Rural Electrification Administration, which, through loans to local co-ops, allowed America's farmers to get the electricity that private electric utilities refused to provide them because of lack of profitability.  In 1934 only 11% of farms had electricity; by 1942 almost 50% did.  Another good example of how society can solve some problems that were beyond the reach of capitalism.

The REA helped bring electric power to some rural communities quicker than they would have gotten it had they waited until the investor owned electric utilities provided the power.  Most REA utilities, known as co-ops, are located in the mid-west and southeast.  They were built with low cost government financing, i.e. tax free bonds.  In addition, in most instances, they pay no income taxes, property taxes, etc. Nevertheless, they are expected to recover their costs from their rate payers.  Again, the operative words are recover costs from the rate payers or users.

Public electric utilities are the other form of public ownership.  These utilities are owned usually by a city or municipality, whereas a co-op is owned by the customers.  The largest public owned electric utility in the United States is owned by Los Angeles, followed closely by one owned by San Antonio.

Most of the rural areas in the United States, contrary to popular belief, were wired by investor owned electric utilities and get their power from these utilities.  In those states with enlightened regulators the utilities were allowed to charge sufficient revenues in the cities to have the resources to extend the power lines out to the folks on the farm.  Texas Power & Light Company, Texas Electric Service Company, West Texas Utilities, Southwest Electric Utilities, El Paso Electric, are examples of investor owned electric utilities that extend service to rural customers.  

Approximately 85 per cent of Americans get their juice from investor owned electric utilities.  And more than 90 per cent of the power is generated by these utilities.  These companies pay income, property, excise and franchise taxes, whereas their public and co-op counterparts pay none of these taxes, although they usually collect a ghost franchise tax.  

In Texas, where competition in the electric utility market is robust, the investor owned electric utilities trounce the public utilities.  For example, in Georgetown, where I live and where the local utility is owned by the city, the residential rate is 10.56 cents per kWh.  In San Antonio, which owns the local electric utility, the residential rate is 11.2 cents per kWh.  In Austin, again where the utility is owned by the city, the rate is 8.7 cents per kWh.  In Dallas, Houston, El Paso, etc, where competition has been introduced, customers can shop for their electric energy.  As a result, they can find rates as low as 8.7 cents per kWh or better from more than 30 retailers.  Why is the Austin rate so low?  Because the utility is losing money and is on the verge of a significant rate increase.

Another point that is frequently overlooked is that most public utilities, as well as co-ops, depend on investor owned electric utilities for a substantial percentage of their power and transmission capabilities.  Austin, for example, buys approximately 35 per cent of its power from investor owned utilities.  The same is true for San Antonio.  Georgetown depends on Oncor, which is part of Energy Future Holdings, for its transmission ties.  

Numerous studies have shown that investor owned electric utilities, especially where competition is permitted, are simply more efficient and effective than public utilities. Government simply does a lousy job of running commercial enterprises.

I don't believe government should run any commercial activity that can be hoisted by competitive businesses in a well regulated market place.    

[henry6]

The Corridor receives subsidies.  The Acela runs on the Corridor.  The A cela returns its investment and thensome because it is market priced and accepted.  The Acela can be said to be subsidizing the Corridor.   If those who ride the Acela took another form of transit it would probably be first a subsidized airline at the same or higher market price or by subisdized  luxury bus similarly priced but with fewer amenities.  The question that comes to mind is how many Acela customers would actually use Regional and how many would seek other means?

[Falcon48]

In response to Sam1, I don't think it's at all appropriate to treat the "spread" between Acela fares and regional fares as a "subsidy" because the passengers paying them may pass the costs on to their customers or clients.  The same can be said of virtually any expense incurred by a business traveler that's reimbursed by his/her employer.  For example, put that "high level manager" paying the Acela fare on an airplane.  The air fare will be passsed on to customers or clients the same as the rail fare. Why isn't that a "subsidy" to the air lines?  And, based on this theory, why would you distinguish between the regional fare and the Acela fare at all?  After all, if the manager uses a slower regional train and pays the lower fare, that fare will similarly be "passed on" to his/her customers or clients. Further, on the corridor, even the regional fares will likely be higher than Megabus.  Is that "spread" a "subsidy" too? 

And let's not stop with rail fares.   How about cost of the nice hotel room and  meal the manager had while on his/her trip.  Those, too, will be ultimately "passed on" to customers or clients.  Are they "subsidies" to the hotel and the restaurant?.  Or are they "subsidies" only to the extent that the costs exceed the price of a Motel 6 room and a Big Mac.?

The fare actually paid for the service received by the passenger is not a "subsidy", regardless of whether it is "high" or "low", and regardless of whether it is ultimately passed on to customers, clients or strockholders as part of a business' cost or price structure or the value of its shares.  To call user charges like this a "subsidy" would mean all expenses incurred by business people and reimbursed by their employers are "subsidies" to those who provided the goods or services for which they were incurred,  In the case of rail fares, that would mean that the only fares that wouldn't be "subsidies" would be the fares paid by non-business travelers.

[blue streak 1]

henry6

REA has nothing to do with this argument line.  REA was railroads trying to keep a product line they thought they needed at the time and was an inside industry decision.

Sorry Henry. I always referred to Railway Express as REX or REAX. Should have clarified REA as the Rural Electrification Agency.

[schlimm]

REA on this thread refers to the New Deal's Rural Electrification Administration, which, through loans to local co-ops, allowed America's farmers to get the electricity that private electric utilities refused to provide them because of lack of profitability.  In 1934 only 11% of farms had electricity; by 1942 almost 50% did.  Another good example of how society can solve some problems that were beyond the reach of capitalism.

[henry6]

REA has nothing to do with this argument line.  REA was railroads trying to keep a product line they thought they needed at the time and was an inside industry decision. Sam's comment about government involvement being problematic as to whether or not private enterprise would have capital to build it is the crux of it all.  Her example of private utilities building the grid does not really apply since most utilities are or were monopolies within their own regions and districts, therefore, at the time, without real competition.  The two most blatant examples of government building was The National Road on the Federal level, and the Erie Canal on a state level.  Neither would or could have been built by private enterprise but both allowed for greater economic expansion than was otherwise feasible.  Likewise, land grants to speculative railroad builders helped open areas to people, agriculture, and industry otherwise not feasible.  And all that was back in the 19th Century.  Rural power grids did in fact get help from the Federal Government if you look at the Tennessee Valley project come to think of it.  If a town didn't pave its streets, build sidewalks and street drainage back 75-150 years ago, they'd never have attracted industry and commerce.  Where does subsidy begin and where does it end? 

[blue streak 1]

Sam1

.  Without government involvement, it is problematic whether private enterprise would have the capital to build it, although most of the electric grid in the United States was built by investor owned utilities. 

But Sam how was REA financed? Didn't the utilities later buy in to REAs when they had developed the market?

[Anonymous]

Historically, the government has played an important role in facilitating the development of the nation's transport infrastructure.  Its involvement was predicated on the basis that the users would ultimately pay for the use of the infrastructure.  For the most part, that has been true, although the payment streams have not always been transparent, e.g. property taxes are used to pay for city streets and county roads, monies are transferred from the general fund to the highway trust fund (a relatively recent development), etc.

Government facilitation of the development of transport infrastructure is appropriate, in my mind, as long as their is a reasonable probability that the taxpayers will get their money back.  This has been largely true in most instances, although there are minor exceptions.  Without government involvement, it is problematic whether private enterprise would have the capital to build it, although most of the electric grid in the United States was built by investor owned utilities. 

The user should see the true cost of transport and should pay the fully allocated cost to use it, unless the transport is dubbed a utility, e.g. local transit systems, para-mobility vans, etc.  When subsidies enter the picture, the user does not understand the true cost.  Therefore, he is likely to chose a mode of transport that may not be the optimum solution for him and society.

Case in point.  Americans drive personal vehicles that get about half the average mileage of personal vehicles in Europe, Australia, New Zealand, etc.  They do so because the full cost of driving does not show up at the pump.  So they don't see the consequence of their behavior and most psychologists agree that behavior is a function of its consequences.

Ultimately, all transport should be funded throuogh user fees paid at the price point, e.g. pump, ticket counter, etc.  If society decides that lower economic people should access to any mode of transport, it can supplement their income directly to enable them to rent space on the mode of transport in question.  This, by-the-way, is how the electric utility industry functions.  If people cannot afford to pay their electric bills, in most states they can get help with them.  But the price of electricity at the transfer points, as well as the end user point, reflects its true cost.  It works reasonable well and is a good method for rationing electric energy, i.e. getting people to conserve its use.

[henry6]

Dragoman

Sam1: you say "I would like to see all transport subsidies go away.  That is to say, although there is a role for government in sponsoring transport infrastructure, the users should pay for it, as will as any operating and maintenance costs.  If they cannot do so they should be allowed to die."

So, no General Fund revenus to the Highway Fund, nor to the air traffic control system, nor for TSA, nor for airports generally.  In fact, all of DOT should only be funded by various user fees?

Why not?  My wife and I were talking about Federal funding etc, this morning.  Billions and Billions and Billions for the war efforts but cut millions and a hundred thousand here and there for other projects like passenger rail services.  If the anti rail group is so bent on private enterprise with no subsidy, then why don't they propose the oil companies and insurance companies (auto insurance) and auto manufacturers be required to build and maintain streets and highways?  Doesn't make sense, can't be done.  We must get over the idea that socialism is so bad because progress can only be achieved by a consortium of government and private enterprise, a proven formula in the United States since 1776! 

On another note: Acela's financial success is, in effect, subsidizing the Northeast Corridor.

[Dragoman]

Sam1: you say "I would like to see all transport subsidies go away.  That is to say, although there is a role for government in sponsoring transport infrastructure, the users should pay for it, as will as any operating and maintenance costs.  If they cannot do so they should be allowed to die."

So, no General Fund revenus to the Highway Fund, nor to the air traffic control system, nor for TSA, nor for airports generally.  In fact, all of DOT should only be funded by various user fees?

[schlimm]

 

 

[Anonymous]

[quote user="dakotafred"]

Sam1 seems to be arguing a matter of abstract principle rather than meaningful dollars and cents, and I am puzzled as to why unless it's from enjoyment of argumentation for its own sake. It can't be from class envy or resentment, because sam1 has regaled us with plenty of tales of his own first-class travels. /quote]

There is nothing abstract about Amtrak's subsidies, which in 2010 were approximately $3.6 billion, and were intended to cover operating losses as well as make capital improvements.  In the scheme of things, i.e. the federal deficit, it is a relatively small amount of money, but I have long believed that one cannot put out a fire (national deficit and debt) by pouring just a little more gasoline on it.

I would like to see all transport subsidies go away.  Although there is a role for government in jump starting national transport infrastructure, the users should pay for it, as well as any operating and maintenance costs.  If they will not do so, the transport mode, especially commercial modes, should be allowed to whither away.

Since you know nothing about my income, class, etc., your comments are out of place and have nothing to do with the subject.  If you think that the Acela service does not receive a subsidy from the federal government or people who use any premium service, irrespective of the carrier, and are paying for it with an expense account, are not passing it on to others, thereby enjoying the ride on someone else, make a case for your view with logic and facts.  But stop throwing barbs that have nothing to do with the discussion.  Forums are for airing differing points of view.  They are not for rants agains the participants.

[Anonymous]

schlimm

Subsidy = 1. a direct pecuniary aid furnished by a government to a private industrial undertaking, a charity organization, or the like.  2. agrant of money, especially governmental, to aid private undertakings. A subsidy  is usually given to promote commercial enterprise: "a subsidy to manufacturers during a war. "   I fail to see who is being subsidized in the case of Acela.  On operating expenses, it pays its own way.  Rather better than the billions in subsidies paid to the oil companies every year through tax credits.

 So, I guess for sam1, words are what sam says they mean.

In many cases a subsidy is substance over form and does not necessarily confirm to a dictionary definition.. 

The Acela receives a direct subsidy from the federal government to help cover the cost of the infrastructure that it runs on, the cost of the equipment that it uses, and the capitalized interest embedded in both.  And many of the passengers, in effect, are having their premium ride subsidized by their clients, customers, taxpayers, etc.

The oil companies receive no direct subsidies other than tax decuctions that generally are available to all businesses.  They are able to take certain credits that are available to all extractive industries, e.g. coal, gas, etc.  They also get a credit for the risks associated with drilling in high risk areas, e.g. Gulf of Mexico, Alaska Slope, etc.  But subsidies paid to oil companies have nothing to do with whether subsidies should be paid to passenger rail, especially for premium services, and whether using premium services via an expense account is a form of indirect subsidy.

Many if not most people don't think of the tax deductions associated with home ownership (mortgage interest, property taxes, exclusion from taxation of most of the capital gain on sale, etc.) as a subsidy.  But economists and accountants have known for years that they are subsidies, even though they don't a traditional dictionary definition of a subsidy.  

[Dragoman]

So, Henry, what can we do to educate the rest to the fact -- as I believe you have repeatedly alluded to -- that the only way to actually have successful passenger service is to operate an integrated system that actually provides a service to its actual and potential riders, as opposed to just operating trains along a track?

[henry6]

Dragoman

Is it "worth the investment to build a railroad just to run Acela?"  I don't think that is the best question. 

But, Dragoma, that is the way HSR is being percieved by many people in this country. It is also the way freight railroads want the public to percieve it.   Most don't know a railroad exists unless it is 1) commuter and the or someone they know ride it; 2) there is a grade crossing which is occupied by a train and holds them up on thier journies; 3) they live next to the tracks and the trains keep them awake; 4) they work for a company that ships or receives (or both) product by rail; and 5) they work for a railroad.  That probably takes care of less than a third of the population.  Mention train and they think of a circle of track around the Christmas tree.

[Dragoman]

Is it "worth the investment to build a railroad just to run Acela?"  I don't think that is the best question.  The NEC (like most other rail line are, and should be) is an integrated transportation corridor -- Acela, Regionals, various commuter agencies, and yes, even a little freight.  Don't forget, Amtrak's financials show income from rents paid by commuter and freight operators.  And, just from a passenger-operations standpoint, I believe that the integrated and inter-related nature of the NEC -- different levels of service, serving different groups of stations -- is exactly what contributes to the Corridor's success (such as it is, reagrdless of exactly how you measure it). 

This model (local & regional services feedin high-speed lines) is what is found on successful European and Japanese lines.  Some adaptation of such a model (rather than one middle-of-the-night train in each direction) might help save long distance services.

Let the arguments begin?

[henry6]

I think, Schlimm, that is is paying is own way of equipment, power (electricity), crew, etc. and then a little bit more.  The subsidy in this case would come in that Acela does not own its own track but Amtrak and MNRR do (CTDOT).  So because of its earnings Acela is a stellar performer by bringing home its costs and then some.  And while we are dazzled by its performance, the question remains is it worth the investment to build a railroad just to run Acela?  Therein begins the arguements.

[schlimm]

Subsidy = 1. a direct pecuniary aid furnished by a government to a private industrial undertaking, a charity organization, or the like.  2. agrant of money, especially governmental, to aid private undertakings. A subsidy  is usually given to promote commercial enterprise: "a subsidy to manufacturers during a war. "   I fail to see who is being subsidized in the case of Acela.  On operating expenses, it pays its own way.  Rather better than the billions in subsidies paid to the oil companies every year through tax credits.

 So, I guess for sam1, words are what sam says they mean.

[dakotafred]

Sam1 seems to be arguing a matter of abstract principle rather than meaningful dollars and cents, and I am puzzled as to why unless it's from enjoyment of argumentation for its own sake. It can't be from class envy or resentment, because sam1 has regaled us with plenty of tales of his own first-class travels.

[henry6]

Sam1

 

The issue regarding the Acela is whether it requires a subsidy that is paid by people who for the most part cannot ride it.  Clearly, this is the case.  All taxpayers are subsidizing the Acela as well as passenger trains in general.  The underlying question, in my mind, is whether Joe Six Pack should be required to subsidize upper class riders on the Acela or any other mode of commercial transport,  

So what would it cost the taxpayer/customer for regular service, if such service was able to exists at all, without the input from profit from the Acela?  In otherwords, Acela is a fund source for the route and its other trains?  So, thats the American entrapenurial spirit: do something that makes money!  Here it is, the money if funneled into the system rather than to stockholders...oh, I see, it is socialism not capitalism.

[Anonymous]

dakotafred

I think sam1's distinction between first class and coach is meaningless on two fronts.

1. As a pass-on cost to customers of the traveling exec or attorney, you're talking pennies per customer -- which, if the customer finds onerous, he can switch his business to a company whose people travel coach.

2. As a subsidized service -- pretend here that only Amtrak is subsidized -- which does a better job of repaying its cost, Acela or the lesser trains of the NEC? Business class or coach? (Sam1 showed us the difference in the cost of a ticket.)

     For that matter, on the LD trains, I'll bet those pricey sleeping accomodations, which so often run full, return more of their cost than all those half-empty coaches. 

How do you know its pennies per customer.  In the legal services audits that we performed (the lawyers screamed bloody murder because we were one of the first large companies in the U.S. to audit its law firms), their travel and entertainment pass through dollars were significant.  They were a small percentage of the whole, but they added up.  Interestingly, we recaptured a significant portion of them because they had been unauthorized by the letters of engagement.  In other words, we caught the lawyers cheating.  Who would have thunk it?

Amtrak does a better job of recovering the Acela's costs, i.e. generates an operating profit, because its revenues are generated from premium class customers, most of whom are not paying for the service out of their pocket.  The same applies, of course, as I said to first and business class air travel. 

[Anonymous]

Paul Milenkovic

I tend to side with Don Oltmann on all of those expense-account business passengers on the Acela.  If these captains of industry, Masters of the Universe as it were, deem to spend their expense account dollars on a premium train instead of the NY-DC Shuttle, maybe there is something to the NARP party line of the train providing downtown-to-downtown service, of providing laptop plugs and tables and valuable in-transit work time.  As to the buck-a-mile NY-Philly per-mile ticket cost, maybe Amtrak can charge that much because the train is providing that much value, at least to somebody.

On the other hand, that the Acela is covering its direct operating cost and contributing to the cost of operating the tracks, and does this by charging taxi-fare levels of ticket prices, maybe that speaks to the fact that for whatever reason, trains happen to be a high-cost way of generating passenger miles.  And the Acela is a train without baggage cars, crew-dorm, sleepers, lounge car, diner, etc -- apart from the panache of being the Acela, it is pretty slim on amenities appreciated by the Lucius Beebe's and E.M. Frimbo's of the world.

That is, the high cost train competes successfuly, confirming all of NARP's talking points about trains, where the alternatives, say taking a plane from NY-Philly or fighting traffic on the NJ Turnpike is even higher cost and less convenient.  That said, maybe the proper application for the train is where such high fares can be charged, and in markets that don't support fares at that level, the train is misapplied.

When a person rides on an expense account, he is not spending his or her dollars.  In most instances he or she is spending someone else's dollars, i.e. clients, customers or victims of government services, i.e. IRS.

Amtrak can charge more than a dollar per mile between Philadelphia and New York because there is no comparable premium commercial service for all practicable purposes.  It is less than 90 air miles from Philadelphia to Newark or the Long Island airports.  Most of the flights are very expensive and, in fact, are intended as connecting flights for overseas travelers.  Or at least it appears that way.

[Anonymous]

Roads do not pay for themselves.  The users pay for them through fuel taxes, excise taxes, sales taxes, fees, and property taxes.  Unfortunately, because of the deceptive way the revenues are collected, most motorists don't see the full cost of building and maintaining the country's roads at the pump.  But they pay for them.

The guy or gal who drives a Cadillac pays a somewhat higher portion of the cost to build and maintain the nation's roads.  His car gets fewer miles per gallon than most more modestly priced vehicles.  In many states he pays more in fees, because of the vehicle's fair market value, to buy and operate it.  Moreover, he probably lives in a better house than the Chevorlet driver, which means he pays more in property taxes, which are used to pay for most city streets and county roads.   

The issue regarding the Acela is whether it requires a subsidy that is paid by people who for the most part cannot ride it.  Clearly, this is the case.  All taxpayers are subsidizing the Acela as well as passenger trains in general.  The underlying question, in my mind, is whether Joe Six Pack should be required to subsidize upper class riders on the Acela or any other mode of commercial transport,  

[daveklepper]

Roads in general (in total) do not pay for themselves, but require tax money in addition to gasoline taxes and motor vehicle registration taxes, and tolls on toll highways.   Nor do I claim that some of this subsidization is bad.   "If you have it, a truck brought it."   Regardless of intermodal or anything else.

 

But just because I drive a Chevorlet is no reason to complain that the Cadillac drive should not get the same level of highway subusidization that I get.   My correct American attitude, as opposed to one believing in Socialism, is:  I am happy he can afford a Cadillac, that makes my Chevorlet affodable to me.   (I am 79 years old and no longer own a personal automobile.   In my driving career, I owned one Ford and two Chevrolets, and appreciate that I could afford a personal car, and was happy occasionally to ride in friends' Cadillacs, Merecedez, Porsche, Oldsmobiles. Buiks, Chryslers, and Lincolns, without feeling jealous.   But many of them never splurged for a private varnish intercity luxury trip.).

 

Again, I am happy that the Acela service is available and people are willing to pay for it.   Their money  makes the Regional Express service more affordable and more available.

[henry6]

What is the surprise here?  This is the perfect case of Amtrak providing a service instead of just running a train.  It is designed, scheduled, staffed, advertised, marketed, and priced  for a particular clientle between specific points and does just what they say it will do.  If as much care and attention were able to be given to other train routes and service offered to meet the deifferent needs, then maybe there would be more trains and more success.  Again: you can't just run a train or a few trains, you have to provide a service that meets the needs of the target clients.  NE Corridor Regional trains are often sold out becuse of the frequency and price.   

[Paul Milenkovic]

I tend to side with Don Oltmann on all of those expense-account business passengers on the Acela.  If these captains of industry, Masters of the Universe as it were, deem to spend their expense account dollars on a premium train instead of the NY-DC Shuttle, maybe there is something to the NARP party line of the train providing downtown-to-downtown service, of providing laptop plugs and tables and valuable in-transit work time.  As to the buck-a-mile NY-Philly per-mile ticket cost, maybe Amtrak can charge that much because the train is providing that much value, at least to somebody.

On the other hand, that the Acela is covering its direct operating cost and contributing to the cost of operating the tracks, and does this by charging taxi-fare levels of ticket prices, maybe that speaks to the fact that for whatever reason, trains happen to be a high-cost way of generating passenger miles.  And the Acela is a train without baggage cars, crew-dorm, sleepers, lounge car, diner, etc -- apart from the panache of being the Acela, it is pretty slim on amenities appreciated by the Lucius Beebe's and E.M. Frimbo's of the world.

That is, the high cost train competes successfuly, confirming all of NARP's talking points about trains, where the alternatives, say taking a plane from NY-Philly or fighting traffic on the NJ Turnpike is even higher cost and less convenient.  That said, maybe the proper application for the train is where such high fares can be charged, and in markets that don't support fares at that level, the train is misapplied.

[dakotafred]

I think sam1's distinction between first class and coach is meaningless on two fronts.

1. As a pass-on cost to customers of the traveling exec or attorney, you're talking pennies per customer -- which, if the customer finds onerous, he can switch his business to a company whose people travel coach.

2. As a subsidized service -- pretend here that only Amtrak is subsidized -- which does a better job of repaying its cost, Acela or the lesser trains of the NEC? Business class or coach? (Sam1 showed us the difference in the cost of a ticket.)

     For that matter, on the LD trains, I'll bet those pricey sleeping accomodations, which so often run full, return more of their cost than all those half-empty coaches. 

[henry6]

Sam1

.....

And if your going to claim that the airlines benefited directly from the military spend, as if there otherwise would have been no development of commercial aviation, then you need to make reference to the governmental support for the development of railroads.  Would there have been no railroads had there been no government involvement?  No one knows.   

But so what?  What does support for the airlines have to do with passenger railroads?  Do you honestly believe that air travel would have been thwarted and people would be happy to spend four or five days on a train getting from New York to California?

The big difference is that the investment in the railroads, prior to the formation of Amtrak in 1971, was paid back.  Equally important, airline passengers and motorists have paid for their infrastructure, although sometimes it is difficult to trace.  Only rail passengers have not been able to generate sufficient revenues to pay for their mode of transport.  Whether that changes in the future remains to be seen.

So I am sticking with my original point.  People who ride first and business class on Amtrak, including the Acela, get a subsidy at the expense of the taxpayers as well as their customers and clients.  As I said, the same concept applies to the customer and client aspects of first and business class air travel.  Presumably we can assume that it is not an issue with the folks who choose to ride the Bolt Bus between Philadelphia and New York, which I might add is a private enterprise operation that gets no subsidies.

Several things, Sam.  One, the airline industry did not have to pay for research and development of aircraft, etc. because the government did.  The railroads had to pay for research and development in the cost of purchase of their equipment.  In the US commercial airports are governements built, operated, and  maintained.  Air traffic control is in the hands of the US government.  Airlines do not pay the full cost of all these services and the cost of an airline ticket does not cover the remaining costs, therefore there is a lot of subisdy and it is very clearly traced.  Same with highway and commercial users like buses and trucks who do not pay full share of the cost of building, maintaining, and policing in perportion to what damage they do.  The Bolt Bus would never be able to operate if the taxpayers didn't build the roads in the first place...subisdies on the highway are also very traceable.

Amtrak has been a political joke and has not paid for itself nor will it ever.  It runs passenger trains and in very few cases can actually say it provides a service.  Acela and the Northeast Corridor is one place there is service along with several other "corridors".  But, the key is to provide service and not just run trains.  Can the government do with Amtrak what they did with Conrail?  They certainly don't act like they want to by not funding or giving it ways and means to be a service provider instead of a train operator. 
 
Today's invstment community is hell bent on getting 80% of every $100 therefore rarely if ever accept 50% of $200.  Somewhere along the line here either Congress or business has got to come to the senses!

[henry6]

Sam1

.....

And if your going to claim that the airlines benefited directly from the military spend, as if there otherwise would have been no development of commercial aviation, then you need to make reference to the governmental support for the development of railroads.  Would there have been no railroads had there been no government involvement?  No one knows.   

But so what?  What does support for the airlines have to do with passenger railroads?  Do you honestly believe that air travel would have been thwarted and people would be happy to spend four or five days on a train getting from New York to California?

The big difference is that the investment in the railroads, prior to the formation of Amtrak in 1971, was paid back.  Equally important, airline passengers and motorists have paid for their infrastructure, although sometimes it is difficult to trace.  Only rail passengers have not been able to generate sufficient revenues to pay for their mode of transport.  Whether that changes in the future remains to be seen.

So I am sticking with my original point.  People who ride first and business class on Amtrak, including the Acela, get a subsidy at the expense of the taxpayers as well as their customers and clients.  As I said, the same concept applies to the customer and client aspects of first and business class air travel.  Presumably we can assume that it is not an issue with the folks who choose to ride the Bolt Bus between Philadelphia and New York, which I might add is a private enterprise operation that gets no subsidies.

Several things, Sam.  One, the airline industry did not have to pay for research and development of aircraft, etc. because the government did.  The railroads had to pay for research and development in the cost of purchase of their equipment.  In the US commercial airports are governements built, operated, and  maintained.  Air traffic control is in the hands of the US government.  Airlines do not pay the full cost of all these services and the cost of an airline ticket does not cover the remaining costs, therefore there is a lot of subisdy and it is very clearly traced.  Same with highway and commercial users like buses and trucks who do not pay full share of the cost of building, maintaining, and policing in perportion to what damage they do.  The Bolt Bus would never be able to operate if the taxpayers didn't build the roads in the first place...subisdies on the highway are also very traceable.

Amtrak has been a political joke and has not paid for itself nor will it ever.  It runs passenger trains and in very few cases can actually say it provides a service.  Acela and the Northeast Corridor is one place there is service along with several other "corridors".  But, the key is to provide service and not just run trains.  Can the government do with Amtrak what they did with Conrail?  They certainly don't act like they want to by not funding or giving it ways and means to be a service provider instead of a train operator. 
 
Today's invstment community is hell bent on getting 80% of every $100 therefore rarely if ever accept 50% of $200.  Somewhere along the line here either Congress or business has got to come to the senses!

[Anonymous]

blue streak 1

 

Sam1:

 

The last airplane that benefited directly from military research and experience was the Boeing 707, which is a carbon copy, in many respects, of the KC-135.  

 

Nope it goes much further. You are correct about the KC-135 however the B-727, B737s were both essentially the same fuselage as the B-707 (KC-135). B-747 fuselage development that came from R & D paid by DOD for the C-5 (which went to lockheed). 

 

Another subsidity that is almost the same amount is the cost of engines. The JTD-3 came from the eninge of the KC-135 This was the engine on B-707,720, DC-8s (JT-4s on some DC-8s also subsidized).  The JT-8 came from fighter jets and powered the DC-9, B-737- 100, -200s . The CFM-56 a GE jet on other B-737s came from military research. B-747 JT-9s came from early C-5 engines. I could go on and on.

But I take umbrage saying the final customer pays all the freight (pass fare) only if riding Acelas. If those business men took an airline instead of train they would bill (either directly or causing employer to hire more persons to do the necessary jobs) for that time they could not work because of work restrictions when flying. Therefore there would be billing for security line waits, taxiing, take offs turbulence etc.    

The operative words are benefited directly.  

The other airplanes were developed because the airlines quickly realized that the jet airplane was much more productive than the piston driven airplanes.  Of course, they benefited from the technology knowledge base.  Had there been no military aviation, the U.S. could have taken a clue from the British, who amongst other things were the first to develop a workable jet engine.

I had a further thought regarding the development of commercial aviation that I did not include in their posting initially.  The earliest commercially viable airliners (DC-2, DC-3, and DC-4) were developed as civilian airliners.  They were not developed as military aircraft, although the military made great use of them during WWII.

And if your going to claim that the airlines benefited directly from the military spend, as if there otherwise would have been no development of commercial aviation, then you need to make reference to the governmental support for the development of railroads.  Would there have been no railroads had there been no government involvement?  No one knows.  

Railroads have also benefited from a technology knowledge base that was spawned in other activities.  The earliest application of steam power was not in the railroads, but rather in factories and steamboats.  Also, one of the earliest applicaions of diesel engines in the United States was the U.S. submarine program, which had learned the hard way that gasoline engines and submarines do not make good bed fellows.  

But so what?  What does support for the airlines have to do with passenger railroads?  Do you honestly believe that air travel would have been thwarted and people would be happy to spend four or five days on a train getting from New York to California?

The big difference is that the investment in the railroads, prior to the formation of Amtrak in 1971, was paid back.  Equally important, airline passengers and motorists have paid for their infrastructure, although sometimes it is difficult to trace.  Only rail passengers have not been able to generate sufficient revenues to pay for their mode of transport.  Whether that changes in the future remains to be seen.

So I am sticking with my original point.  People who ride first and business class on Amtrak, including the Acela, get a subsidy at the expense of the taxpayers as well as their customers and clients.  As I said, the same concept applies to the customer and client aspects of first and business class air travel.  Presumably we can assume that it is not an issue with the folks who choose to ride the Bolt Bus between Philadelphia and New York, which I might add is a private enterprise operation that gets no subsidies.

[blue streak 1]

Sam1

The last airplane that benefited directly from military research and experience was the Boeing 707, which is a carbon copy, in many respects, of the KC-135.  

Nope it goes much further. You are correct about the KC-135 however the B-727, B737s were both essentially the same fuselage as the B-707 (KC-135). B-747 fuselage development that came from R & D paid by DOD for the C-5 (which went to lockheed). 

Another subsidity that is almost the same amount is the cost of engines. The JTD-3 came from the eninge of the KC-135 This was the engine on B-707,720, DC-8s (JT-4s on some DC-8s also subsidized).  The JT-8 came from fighter jets and powered the DC-9, B-737- 100, -200s . The CFM-56 a GE jet on other B-737s came from military research. B-747 JT-9s came from early C-5 engines. I could go on and on.

But I take umbrage saying the final customer pays all the freight (pass fare) only if riding Acelas. If those business men took an airline instead of train they would bill (either directly or causing employer to hire more persons to do the necessary jobs) for that time they could not work because of work restrictions when flying. Therefore there would be billing for security line waits, taxiing, take offs turbulence etc.    

[henry6]

Sam1

 

........

Many folks on these forums are quick to point to supposed subsidies received by the airlines, but seem to over look the large subsidy received by passenger rail (higher per passenger mile than any competing mode of transport) or forget that most of the railroads in the U.S. got their start with significant government support.

The amount of so-called subsidies received by competing modes of transport is irrelevant.  The key question is where is passenger rail a viable option, at what level, and how much should the country invest in it?  Obviously, this is a legitimate question.  And it is part of the national debate that will be on-going for years, I suspect. 

 

Passenger rail subsidy appears larger because of fewer riders...if ridership was up, it would be less, and maybe equal to airline and other modes.  But you are right about the subsidies being irrelevant when it comes to wanting and paying for higher levels of quality and service; even paying a price for a label!.  I know of an instance of a furniture dealer who sold a friend of his a living room set for less than the high end store down the street but had to deliver it in a plain truck so that the neighbors wouldn't know the purchase was made at the low price store.  Another instance I had customer who was a gift and antique shop in a touristy town who's prices were double those of  shops outside the town!  But there were people willing to pay the higher price all the time.

 

[Anonymous]

henry6

 

joe323:

 

The thing tat I do not get (and I suppose thats because I travel little) is why anyone would pay the premium to ride Acela, when a regular NEC is only about 20 minutes more.  I resarched this last year for a business trip I made from NYC to washington last year.

 

 

 

First, Sam!  Airlines are subsidized by government money for research for military purposes which transposes to commercial airplanes; by municipal building and owning airports; by air traffic controllers just for starters.

But Joe, the point is that people with money will pay money for the service.  Plus people want choices of service levels, comfort and time and amenities.  As an aside, in my Ride With Me Henry trips, we have ridden Amtrak NYP to Poughkeepsie, NY returning by MNRR and to Stamford, CT returning by MNRR.  In both cases, as I remember, the one way Amtrak tickets was equal to the round trip fare on MNRR.   But the speed and the comfort of the ride was sooooooo different!  The comfort of the seats, the suspension of the car, the lighting, etc. 

The last airplane that benefited directly from military research and experience was the Boeing 707, which is a carbon copy, in many respects, of the KC-135.  

You could stretch this claim further, as NARP has done, that the airlines have benefited from NASA research.  This is true.  It is equally true that the railroads have also benefited from the same or similar research, e.g. micro-processors, GPS, etc.

Many folks on these forums are quick to point to supposed subsidies received by the airlines, but seem to over look the large subsidy received by passenger rail (higher per passenger mile than any competing mode of transport) or forget that most of the railroads in the U.S. got their start with significant government support.

The amount of so-called subsidies received by competing modes of transport is irrelevant.  The key question is where is passenger rail a viable option, at what level, and how much should the country invest in it?  Obviously, this is a legitimate question.  And it is part of the national debate that will be on-going for years, I suspect. 

[Anonymous]

schlimm

True, true.  There is a big difference between Acela which more than covers operating expenses from farebox revenues and long distance trains, which are huge losers.  Given that, the use of the term "subsidize" in discussing Acela is inaccurate at best , disingenuous at worst. 

Yep!  If you cannot come up with a logical rebuttal, just claim that the terms are inaccurate and disingenuous.

[Anonymous]

dakotafred

Also: We are used to sam1 beating up on Amtrak for failing to cover its operating costs out of the farebox -- for undercharging, in effect. Is it fair or consistent of him to also jump on Amtrak for overcharging on Acela?

It looks to me as if Amtrak is being smart, for once, by not leaving money on the table. Surely sam1, of all people, salutes the principle of willing buyer-willing seller. 

No problem with willing buyer-willing seller.  The problem is the seller is offering a heavily subsidized service to premium customers who would not in all probability pay the fully recoverable market rates.

 

[Anonymous]

There is only one intercity passenger railroad in the United States.  Amtrak requires one dollar of subsidy for every two dollars of revenue that it brings in.  Actually, that is for the operating expenses.  If the capital expenditures are included, the ratio gets even worse.

Amtrak should offer whatever service can be supported by the market place.  It should charge a fare that recovers all the costs of the service, as is the case for airlines, bus companies, cruise lines, etc. This is especially true for premium services, i.e. Acela, business class, sleeper class, etc.  The only reason the Acela can charge less than the shuttle between Washington and New York or New York and Boston is because it is heavily subsidized.  If it had to cover all of its attributable costs, it would be challenged to offer the service at competitive market rates.

If the country believes that passenger rail service is in the public interest, to use an over worked phrase, the subsidy should be restricted to coach class.  If I remember correctly, this is what the Inspector General was saying, at least by implication, when he recommended that Amtrak's long distance trains offer only coach service. 

The airlines use approximately 30 per cent of the airport capacity and air traffic control capacity in the United States.  Most of it is used by general aviation and the military.  The airlines pay for the portion of the system that they use.  In fact, they argue that they pay more than their proportional share, and they have some studies to back-up their argument.  

Most of the 525 airports the United States that are served by commercial airlines are operated by public authorities.  They are paid for by gate fees, landing fees, terminal rentals, parking lot fees, hangar fees, FBO fees, etc.  With the exception of some rural airports, most of them do not require a subsidy from the federal or state governments.  On occasion, the federal government, through the airports improvement program, makes grants and loans to airports.  Usually the airports are required to pay for them.  

The biggest subsidy received by the nation's airports comes in the form of tax free financing.  Because airports are built and operated by local government authorities, they can issue tax free bonds, which bear lower rates than would be the case if they had to issue debt in the fully taxable bond market.   

Passenger trains only make sense in relatively short, high density corridors where the cost to expand the highways and airways (America's core passenger transport infrastructure) is prohibitive.  

[henry6]

joe323

The thing tat I do not get (and I suppose thats because I travel little) is why anyone would pay the premium to ride Acela, when a regular NEC is only about 20 minutes more.  I resarched this last year for a business trip I made from NYC to washington last year.

 

First, Sam!  Airlines are subsidized by government money for research for military purposes which transposes to commercial airplanes; by municipal building and owning airports; by air traffic controllers just for starters.

But Joe, the point is that people with money will pay money for the service.  Plus people want choices of service levels, comfort and time and amenities.  As an aside, in my Ride With Me Henry trips, we have ridden Amtrak NYP to Poughkeepsie, NY returning by MNRR and to Stamford, CT returning by MNRR.  In both cases, as I remember, the one way Amtrak tickets was equal to the round trip fare on MNRR.   But the speed and the comfort of the ride was sooooooo different!  The comfort of the seats, the suspension of the car, the lighting, etc. 

[Anonymous]

Phoebe Vet

"most of the Acela passengers are executives, high level managers, senior professionals, lawyers, consultants, etc. The majority of them are probably riding on an expense account. Accordingly, in most instances the cost of the ride will be passed through to the customers who buy the goods and services of the business, government agency, law firm, consulting firm, etc. "

Right. There are none of those people on the airlines, and certainly none of them flying first class on the airlines.  What a strange complaint. 

Several of the key points embedded in my comments have been missed.

The Acela covers its operating costs only because it is a premium service.  Otherwise, it would not be able to do so.  It still requires a large subsidy for the capital costs.  And according to Fred Frailey, its costs $370 million a year to maintain the NEC.  Of course, not all of them maintenance cost is allocable to the Acela's, but most of the improvements  in the NEC were made to accommodate the Acela's.

The premium fares are paid by riders who for the most part are on an expense account.  They are passing the cost through to the ordinary Americans who buy their goods and services or have them imposed on them.  Few of these ordinary Americans can afford to ride the Acela, yet the goods that they buy and the taxes that they pay help support a premium rail service.  This is fair?

It is the premium portion of the fare, which is the difference between the Acela fare and the regional fare, that is the premium pass through.  Most corporations require all but their top executives to travel coach class.  

The majority of air travelers between Washington and New York fly coach class.  The majority of them use the shuttle.  Some of the same class of travelers that ride the Acela are authorized to fly business class on the shuttle or any carrier.  Again, the premium fare is passed through to ordinary Americans who for the most part cannot afford to fly business class.  I am as opposed to passing premium airfares through to ordinary Americans as I am to passing premium train fares through to them.  

Moreover, the airlines are not supported by the taxpayers, as is the case of Amtrak.  Just witness the number of airlines that have gone out of business over the past couple of decades.  If they were supported by the government, would it have allowed them to crater?

[DMUinCT]

Sam1,

Are you saying that Railroads should only offer 3rd Class (Coach) service on all trains?  No 2nd Class (Business Class) or 1st Class (1st Class) for customers that want more?  

 Can you compair Regional Service with Coach and Business Class to Acela with Business and 1st Class.  Acela runs on a faster schedule with 1/3 more room in the cars.   How about a Dinner from the Menu served on china plates in 1st Class?   Keep in mind, Acela fares are pegged below the competing air fares, more service, less money.

Should Airlines be required to build there own Airports?   Should Airlines be required to build and maintain the Air Traffic Control System?

I know I'm going to start somethig now!

If there is Competition and a Profit is to be made, let the Free Enterprise System work, keep the Government out of it.  This is Capitalism at its best.    If the Goods or Service has no compition, let the Government Regulate it to prevent abuse.   If the Goods or Service is needed, or required by the Public or Military, and that can not be done at a Profit, then, and only then, it's up to the Government to steep in and do it.

[joe323]

The thing tat I do not get (and I suppose thats because I travel little) is why anyone would pay the premium to ride Acela, when a regular NEC is only about 20 minutes more.  I resarched this last year for a business trip I made from NYC to washington last year.

[Phoebe Vet]

"most of the Acela passengers are executives, high level managers, senior professionals, lawyers, consultants, etc. The majority of them are probably riding on an expense account. Accordingly, in most instances the cost of the ride will be passed through to the customers who buy the goods and services of the business, government agency, law firm, consulting firm, etc. "

Right. There are none of those people on the airlines, and certainly none of them flying first class on the airlines.  What a strange complaint.

[schlimm]

True, true.  There is a big difference between Acela which more than covers operating expenses from farebox revenues and long distance trains, which are huge losers.  Given that, the use of the term "subsidize" in discussing Acela is inaccurate at best , disingenuous at worst. 

[dakotafred]

Also: We are used to sam1 beating up on Amtrak for failing to cover its operating costs out of the farebox -- for undercharging, in effect. Is it fair or consistent of him to also jump on Amtrak for overcharging on Acela?

It looks to me as if Amtrak is being smart, for once, by not leaving money on the table. Surely sam1, of all people, salutes the principle of willing buyer-willing seller.

[daveklepper]

From what I read, Acela does earn a profit and helps support other trains in the NEC.   As long as the regional expresses are reasonably fast and comfortable, I see no problem.   I may never ride one, but possibliy the regional express I will probably ride some day is made possible in part by profits earned by the Acelas.

[henry6]

If there is one thing I've learned in years of selling and marketing is that people with money will spend it on things they want or need at higher price than others.  You can buy the exact same item at Walmart for a buck, Target for 2 bucks, Khols for 3, Macy's for 5 and Nieman Marcus for $10; some people will only buy from Nieman Marcus and that's that!

[dakotafred]

Like henry6, I don't see a problem. The cost of doing business -- including fancy executive salaries -- is always passed on to the customer. Furthermore, the customer can be seen as an Acela user, since that rail fare is part of the overhead, like office space, he pays for with the product.

Anyway, what is the difference between the customer paying for the exec's Acela fare and paying for an airline ticket for the same exec?

I know, the airline is "private" -- ha ha -- and bad old Amtrak is "public" and subsidized, thereby theoretically costing the exec's customer a second time (if he pays income taxes, which half of us do not).

But again -- if that customer is a flyer himself, he underwrites the exec's air trip a second time with that portion of his user taxes and fees devoted to air-traffic control, tarmac,etc.

The out-of-pocket difference to the customer sam1 is worried about? Probably zilch. 

[henry6]

Pricey but marketable.  And helps keep airlanes along the east coast clear for existing traffic.  But what we peons rarely understand is that those with money have and do spend money when and if the product suits them. So why not get their money?  So, ACELA suits them!  Downtown to Downtown plus airport connections, ability to stretch one's legs, room to do your work (wi fi connections in many locales),  enjoy a meal or snack or drink, no hassle with Security at the terminals (usually).  It is a service they are willing to pay extra for and they do.