The Acela is a pricy ride. Few ordinary Americans can afford to ride it. But they help support it directly and indirectly.
Outlined below are some fares for Wednesday, April 27th stated in average price per passenger mile. The miles between the locations shown and the fares were rounded. Of course, Amtrak's fares change daily, depending on demand. April 27th is more than three weeks away, so the prices shown are probably near the low point.
The Acela (average) fare from Washington to Boston is 37 cents per mile, whilst the average fare on a Northeast Regional train is 21 cents. Between Washington and New York the Acela fare is 64 cents and the regional fare is 25 cents. The Acela fare from Philadelphia is $1.04 and the regional fare is 40 cents. From Providence to New York the price of an Acela ticket is 51 cents, whilst the regional ticket bills out at 23 cents. First class on the Acela is even pricier: $1.75 per mile from Philadelphia to New York and 88 cents from Providence to New York as examples.
Who really pays to use the Acela? What a silly question, Sam. The passengers! Not necessarily!
If my observations based on ridding the Acela between Philadelphia and New York are accurate, 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. So, at the end of the day, except for the relatively small percentage of passengers who pay the fares out of their pocket, the Acela's premium service is subsidized by non-users. Of course, most of them don't have a clue that they are doing so. And it should not be forgotten that part of the cost of the Acela service is underwritten by federal, state, and local taxpayers. All aboard! It's a heck of a deal if you can afford it or someone else is paying the tab.
The classes of people who ride the Acela are also the folks who frequently fly business class. And as is the case with the Acela, ultimately the premium business class fare, as well as first class, as is the case with the Acela, is subsidized by the people who buy the goods and services of the sponsoring organization. Again, without their knowing it!
The subsidy, in my mind, is the difference between the peasant fares and the patrician fares.
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.
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
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.
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!
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.
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.
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.
C&NW, CA&E, MILW, CGW and IC fan
"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.
Dave
Lackawanna Route of the Phoebe Snow
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.
Joe Staten Island West
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.
Don U. TCA 73-5735
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?
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.
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!
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.
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.
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
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.
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.
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,
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.
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.
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.
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.
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