How about privatizing Amtrak sleepers or diners?

[Phoebe Vet]

Deregulation also resulted in the collapse of several major players in the airline industry with the resulting loss of a lot of high paying jobs.

[henry6]

What can be said is that Amtrak and the United States Postal Service have a common problem, a common enemy, a common aid: Congress.  Until the fickleness, contridictions, conditional fiats, ignorance, and egos of politics are removed there will be very little understanding, progress, resolve, or service from either.  But if that is all cleared up, what will we have to argue, discuss, blame, and complain about?

[HarveyK400]

Phoebe Vet

Deregulation also resulted in the collapse of several major players in the airline industry with the resulting loss of a lot of high paying jobs.

This is a cautionary tale for railroads generally and Amtrak labor.  Good-paying jobs are being squeezed by competition within industries like airlines and trucking; and ultimately this extends into other modes and their ability to compete.  Airlines and trucking receive a degree of public support for air traffic control and roads and railroads have gotten to a point where they can reinvest in infrastructure upkeep and improvement from revenue; but ultimately there is a competitive price and service point between modes.  Railroad wages will be squeezed along with those in other modes.  Sleeping car services face the same combinations of competition.

A train is a special environment where labor is brought along to keep the train moving and avoid long schedule-killing stops.  The advent of auto travel brought an end to meal (and overnight motel) stops where a train, if not faster, could save time and be more time competitive.  Air travel changed that, reducing long-distance rail travel to its little niche.

I do not see privatization of dining and sleeping car services as a panacea for long-distance services.  Part of the problem is offering wages that will attract a stable workforce that will not flee to a better job with the result of higher training costs with more frequent turnover, Amtrak or private.  Another may be evaluating current duties and productivity - what does a car attendant do, for instance, beside turn down or put up beds - and this is time-sensitive within relatively narrow hours, make coffee in the morning, and assist passengers as needed?  Would a buffet, typical of the cruise ship, be less labor-intensive than table service; but would more food be wasted in the process?

[oltmannd]

HarveyK400

 

Phoebe Vet:

 

Deregulation also resulted in the collapse of several major players in the airline industry with the resulting loss of a lot of high paying jobs.

 

 

This is a cautionary tale for railroads generally and Amtrak labor.  Good-paying jobs are being squeezed by competition within industries like airlines and trucking; and ultimately this extends into other modes and their ability to compete.  Airlines and trucking receive a degree of public support for air traffic control and roads and railroads have gotten to a point where they can reinvest in infrastructure upkeep and improvement from revenue; but ultimately there is a competitive price and service point between modes.  Railroad wages will be squeezed along with those in other modes.  Sleeping car services face the same combinations of competition.

A train is a special environment where labor is brought along to keep the train moving and avoid long schedule-killing stops.  The advent of auto travel brought an end to meal (and overnight motel) stops where a train, if not faster, could save time and be more time competitive.  Air travel changed that, reducing long-distance rail travel to its little niche.

I do not see privatization of dining and sleeping car services as a panacea for long-distance services.  Part of the problem is offering wages that will attract a stable workforce that will not flee to a better job with the result of higher training costs with more frequent turnover, Amtrak or private.  Another may be evaluating current duties and productivity - what does a car attendant do, for instance, beside turn down or put up beds - and this is time-sensitive within relatively narrow hours, make coffee in the morning, and assist passengers as needed?  Would a buffet, typical of the cruise ship, be less labor-intensive than table service; but would more food be wasted in the process?

It would be no panacea, but it might take some of the heat out of the arguments used against Amtrak in general.

Evaluating the role and duties of the employees should be a natural part of any competitive business.  Amtrak has had little incentive to investigate ways to change 50 year old traditions.  Hospitality is not one of Amtrak's core competencies that is unique to Amtrak.   Why not hospitality industry experts in to do what is really hospitality work?

[Phoebe Vet]

I'm not really taking a side in this discussion, but I bet that Holiday inn doesn't pay anywhere near the the salary and benefits to their housekeeping staff that Amtrak pays to their car attendant.

I would ask someone in the railroad industry to advise us whether crew hours of work limits would apply to a person who is actually a housekeeper with no duties in the safe operation of the train.

[PNWRMNM]

Vet,

In ATK context Hours of Service law applied only to operating crew; engineer, fireman, conductor, and brakemen.

Mac

[ecoli]

oltmannd

 

ecoli:

 

oltmannd: ...No staffing levels specified.  No min or max fares specified.  No menu for diner specified.

 It goes out for bid.  I'd guess that cruise ship lines and hoteliers might be interested since they already a have the corp competencies for this kind of business and it would be incremental business that would fit into their existing product line.  No need to run a commissary, laundry,  occupy dorm space in sleepers, etc.  So, they calculate to make a good return, they'd need a subsidy of $2M per year from Amtrak.  They win.  Amtrak pays them the $2M in monthly installments and now we have a service-sensitive operator.

Alternatively, maybe one of the airlines would be interested. With no specification of staffing levels, fares, or menu, they could underbid the cruise ship lines and hoteliers. Then they could make their profit by charging an extra fee if the passenger wants bedding and a blanket; or wants to bring luggage onto the train; or wants to take a shower. They could offer boxed-lunch meals at fine-dining prices once you're captive on the airplane--oops, I mean the train.

The belief that privatization improves service is so pervasive, but the evidence for that belief is so inconclusive. :-)

 

 

Wouldn't happen that way because of the fundamental difference between why people fly and a why people ride sleepers on trains.  One is about getting from A to B.  Period.  The other is about the trip.  It's why cruise ships aren't like airlines.

Ok, how about a more serious example: concessions in the US National Parks which are run by private firms who bid for them. They are infamous for charging more and delivering less than businesses located a few miles outside the park boundaries. Whenever you buy a sandwich or a bag of chips or a night of camping from Xanterra, Delaware North, or Aramark, you can be sure you'll feel you've been robbed. When I stopped by the Crane Flat store in Yosemite this summer, the fruit bin hadn't been restocked, the coffee stations had an "out of order" sign, and a sandwich cost $9.

When--as in the case of cruise ships--the marketplace delivers good service at good value, the magic isn't in the fact that it's non-governmental. The magic is in the fact that customers can easily take their business elsewhere if they're not happy. The fewer choices the customer has, the less magic.

I would guess that most Amtrak passengers have at least once wanted to cry out in frustration, "the heck with you, I'm taking my business elsewhere next time." But of course passengers who want to travel by train have no choice other than Amtrak. If privatization means the passenger has no choice other than a monopoly concessioner, whether that's Xanterra, Princess, or Hilton, the outcome is unlikely to be happy. If you can figure out a way to give the passenger a choice of at least two private providers on each route, your chance of success is greater.

My message is that while privatization can work, it's tricky to arrange the ground rules so that it does--quite the opposite of the "it has to be better" generalizations in this forum.

[HarveyK400]

oltmannd

 

...Hospitality is not one of Amtrak's core competencies that is unique to Amtrak.   Why not hospitality industry experts in to do what is really hospitality work?

Why doesn't hospitality experience be a senior staff requirement within the organization?  Or sending senior staff to training and to confer with hospitality leaders?  This must be encouraged by the CEO.

[John Bredin]

oltmannd

Amtrak has had little incentive to investigate ways to change 50 year old traditions.

Really?! Congress and various Presidential administrations slashing Amtrak's budget and sometimes calling for its demise hasn't given it incentive to change and find new ways of doing things?! Amtrak hasn't made any significant changes from private railroad days, found any cost savings?

[henry6]

Incentives??? You mean saying "you can't do this, you can't do that, don't do this, don't do that, and here is no money so you can't" is an incentive?  John, and everyone else, Amtrak is not a business based on business models, it is a Lionel trainset based on politics, and is operated or not operated at the behest of Congress and not by businessmen nor public demands.  Management...all of them, good or bad...have to spend most of their time attending to the whims of Congress rather than the operation of a railroad or business.  Change Amtrak legislation, make it more like the Post Office or make it like seminal Conrail, but don't make it a toy for politicians to ruin.

And, yes, there have been many "savings" carved out of the carcass over the years...rather than taking political swipes at Amtrak at this time, read the history of Amtrak, how it came about, why, by whom, the succession of presidents and boards, where it is today verses where it was 41 years ago.

 

 

[PNWRMNM]

John,

By 1970 the railroads had been in the passenger business for over 130 years and by that time had most things worked out.  As did the freight railroads ATK was able to lengthen some operating crew districts.

Think about it seriously. What options for change are there. If you are going to have a dining car then you need cooks, a steward, and waiters to do it. Since you have relatively few seats it would be wise to overstaff with waiters to speed up seat turnover. Dining car staff and sleeper attendents work the entire rote, Chicago to Seattle and return.  Do you think there is anything to be gained by changing them out periodically as has to be done with operating crews?

How about equipment maintenance? You may be able to improve here and there around the edges but a passenger car requires a lot of maintenance and always will. Remember the last technological breakthrough was stainless steel in the 1930's.

I am no fan of ATK, but they are working within a small box of possibilities.

Mac

[HarveyK400]

henry6

Incentives??? You mean saying "you can't do this, you can't do that, don't do this, don't do that, and here is no money so you can't" is an incentive?  John, and everyone else, Amtrak is not a business based on business models, it is a Lionel trainset based on politics, and is operated or not operated at the behest of Congress and not by businessmen nor public demands.  Management...all of them, good or bad...have to spend most of their time attending to the whims of Congress rather than the operation of a railroad or business.  Change Amtrak legislation, make it more like the Post Office or make it like seminal Conrail, but don't make it a toy for politicians to ruin.

And, yes, there have been many "savings" carved out of the carcass over the years...rather than taking political swipes at Amtrak at this time, read the history of Amtrak, how it came about, why, by whom, the succession of presidents and boards, where it is today verses where it was 41 years ago.

Amtrak is a business attracting revenues and minimizing expenses in a complex competitive and political environment.  I cannot dismiss the role politics plays; but Amtrak has economic bounds that affords a "business" target for those politicians and critics wanting its reduction or elimination.  Amtrak's longevity is owed to a favorable balance of costs and services.

I too have wondered about decisions made that seem to rely too much on what was done in the past and not on current or anticipating future needs and priorities.  Fleet renewal and expansion investment first in costly long-distance services rather than more economical medium-distance corridor services seems questionable and deserves a rational explaination. 

 

[HarveyK400]

PNWRMNM

...Think about it seriously. What options for change are there. If you are going to have a dining car then you need cooks, a steward, and waiters to do it. Since you have relatively few seats it would be wise to overstaff with waiters to speed up seat turnover. Dining car staff and sleeper attendents work the entire rote, Chicago to Seattle and return.  Do you think there is anything to be gained by changing them out periodically as has to be done with operating crews?

Suggesting buffet food service, I hadn't considered the need to turn over limited seating.  A buffet would encourage people to linger and over-eat.  Good point; still I don't know about the over-staffing with waiters.

[blue streak 1]

Mac: Good analysis that I would like to expand.

PNWRMNM

John,

.  As did the freight railroads ATK was able to lengthen some operating crew districts.

That definitely helped the bottom line and the use of only one on locos of less than 6 hrs.

Think about it seriously. What options for change are there. If you are going to have a dining car then you need cooks, a steward, and waiters to do it. Since you have relatively few seats it would be wise to overstaff with waiters to speed up seat turnover.

The extra staff in the dining cars will become more important as certain trains increase their ridership and need to speed turnover. Of course at a certain point there will be the need of a second dining car or at least a lounge car dining can be done in.

 Dining car staff and sleeper attendents work the entire route, Chicago to Seattle and return.  Do you think there is anything to be gained by changing them out periodically as has to be done with operating crews?

That would maybe increase costs as the check in and checkout times of an attendant would add to total time on duty.

How about equipment maintenance? You may be able to improve here and there around the edges but a passenger car requires a lot of maintenance and always will. Remember the last technological breakthrough was stainless steel in the 1930's.

For those who know the availability of aircraft is much less than a RR passenger car. You will find that a 12hr / day availability of an aircraft is about maximum. Overhauls ( C checks )  will also take anywhere from 5 days to 45 days depending on the level.  Amtrak publishes an availability of about 85% 

I am no fan of ATK, but they are working within a small box of possibilities.

Mac

Good points MAC!!

Alan

[Deggesty]

PNWRMNM

Think about it seriously. What options for change are there. If you are going to have a dining car then you need cooks, a steward, and waiters to do it. Since you have relatively few seats it would be wise to overstaff with waiters to speed up seat turnover. Dining car staff and sleeper attendents work the entire rote, Chicago to Seattle and return.  Do you think there is anything to be gained by changing them out periodically as has to be done with operating crews?

.

Mac

I do not know if this is the current practice, but, as I recall, the railroads paid the dining car personnel for all the hours that they were on board a train. Coach porters changed out at major stops along the way on some roads; Pullman porters and conductors were on duty from before departure from the origen to after arrival at the destination.

As to changing on-board service personnel here and there, do you change diner personnel (who may also be coach/sleeper attendants) in the middle of a meal? (VIA may do this in Winnipeg on the westbound Canadian, which is scheduled to arrive at 0800 and to depart at 1200 (the eastbound train is scheduled to arrive at 2030 and to depart at 2330--all on board service personnel change in Winnipeg.)

[oltmannd]

John Bredin

 

oltmannd:

Amtrak has had little incentive to investigate ways to change 50 year old traditions.

 

Really?! Congress and various Presidential administrations slashing Amtrak's budget and sometimes calling for its demise hasn't given it incentive to change and find new ways of doing things?! Amtrak hasn't made any significant changes from private railroad days, found any cost savings?

They have, but typically not in on board services - and not until they are threatened or pushed.  They have very long crew districts and lots of one man in the cab operation.  All very good.  But, other than car designs that pack more people into each car, nothing much on the the on board staffing.  Some nibbling around the edges such as plastic instead of china - but that's mostly for show.

But, in Amtrak's defense, why should they look for cost savings?  That would bring all pain and no gain to the organization and it's individuals.  You figure out how to cut costs and all you'll get is next year's subsidy chopped by the same amount, so why spend the effort and risk to try something?

The game is rigged against them.  If you could fix the game, maybe there could be different results.

Such as, why do car attendants have space to sleep on the train?  Why not swap them out with the operating crew and create more revenue space?  Why cook on the train?  Why not "cater" the dining car from fixed facilities using existing restaurant kitchens?  Why not hire Darden or Marriot or Norwegian to run this side of the business?  Bid it out.  Let them do the marketing, set the fares and keep the revenue.  See how low you can get the subsidy and then share the savings with the employees.  The lower the subsidy, the higher the corp. bonus.

[oltmannd]

PNWRMNM

John,

How about equipment maintenance? You may be able to improve here and there around the edges but a passenger car requires a lot of maintenance and always will. Remember the last technological breakthrough was stainless steel in the 1930's.

 

Mac

Maybe more than you think.  Tilting suspension.  Electronic air brake.  Better metallurgy and method of casting wheels. Long-lived wiring insulation.  Better wiring connectors.  HEP.  Modular interiors.  Single shoe composition brake rigging.  etc. etc.

[Paul Milenkovic]

oltmannd

You may be able to improve here and there around the edges but a passenger car requires a lot of maintenance and always will.

Mac

 

If passenger trains require high levels of maintenance, why bother with passenger trains in today's high labor-cost economy?  Steam locomotives required high levels of maintenance, and apart from some tourist or enthusiast operations, we have done away with them.

There are intrinisc features of steam locomotives that make them high maintenance, especially in the low-volume tourist and enthusiast operations.  A biggy is the boiler.  Not only are we in a high labor-cost economy, we are in a high value placed on human life economy, and operating steam locomotive boilers in conformance with safety regs costs coin.

What is there about passenger trains that requires high levels of maintenance, apart from "someone in the know" scolding us "arm chair railroaders who think railroading is easy"?

What the steel-wheel on steel-rail mode has different from the rubber tire and air modes is a high shock and vibration environment.  Is that what makes passenger trains intrinsically expensive, that is, a door, or a seat, or an air conditioner, or a whatever that is suitable for a bus or an airplane won't hold up in the railroad environment?

[blue streak 1]

Paul Milenkovic

 

 

What is there about passenger trains that requires high levels of maintenance, apart from "someone in the know" scolding us "arm chair railroaders who think railroading is easy"?

Paul: I have been involved in aircraft "C" checks and they are expensive. A freighter may require as much as $600,000 to do one which can occurr every 9 months. Passenger interiors are about what you would expect in a RR car.

What the steel-wheel on steel-rail mode has different from the rubber tire and air modes is a high shock and vibration environment.  Is that what makes passenger trains intrinsically expensive, that is, a door, or a seat, or an air conditioner, or a whatever that is suitable for a bus or an airplane won't hold up in the railroad environment?

The Doors are anywhere from $20,000 -  $40,000 depending on size and if an emergency slide is built into the door. Have seen 8 - 10 replaced over my time.  Air conditioning is much more expensive in aircraft as they use an air cycle machine and any A/C current is 400 Hz. Aircraft  

[henry6]

Paul your questions are good ones and show the confusion that enters these discussions.  The cost of doors is the one that intrigues me the most.  Hate to use the term "in the old days" but...well doors used to be doors, maybe heavier duty than your bedroom or even front door, but a door nevertheless.  I opened with a latch and on hinges.  Manually.  The most blatent and graphic example of what happened is demonstrated in the difference between the Budd RDC's and the Budd SPV's.  RDC's had normal, manual, hinged and latched doors.  The SPV had automatic sliding and I believe interlocked, doors controlled from a central locaction, not unlike mass transit subway cars and designed by aircraft engineers.  But it became the focal point of the failure of the SPV's when they didn't work and couldn't be manually overridden (or someother inconvenience).  Add to the door thie high platform/low platform needs, and so you've got problems.  Yeah, today's passenger doors are much better than the SPV, less critical than an airplane door, but definitely not passenger operable.  Air conditioning is a must, today, and is more expensive.  So yes, rail cars for people are expensive...but are they any more expensive (comaratiavely) to advances and needs of air or bus?  Even my own automobile is no longer cheap to maintain as I can't do the normal upkeep on it myself anylonger because of onboard computers and other high falutten stuff.  So, it all is realative. 

I also get a kick out of our  fear of things being labor intensive.  Then we complain that we have unemployment.  So if a job can be done by a person, and it make something work well and correctly, then why not employ a person to do the job?  We contradict ourselves all the time on this.

 

[HarveyK400]

Paul Milenkovic

 

...What the steel-wheel on steel-rail mode has different from the rubber tire and air modes is a high shock and vibration environment.  Is that what makes passenger trains intrinsically expensive, that is, a door, or a seat, or an air conditioner, or a whatever that is suitable for a bus or an airplane won't hold up in the railroad environment?

I would say higher shock for railway vehicles is untrue.  Railway and highway vehicles generally moderate speed for rough roads and track; and their suspension is scaled to the respective weight.  While aircraft at high altitudes can avoid turbulence, severe turbulence and stress on airframes may be unavoidable departing or approaching airports - and it's scary.  Part of the issue may be the design life of a vehicle before being extended with rebuilding.

[Paul Milenkovic]

henry6

 So yes, rail cars for people are expensive...but are they any more expensive (comaratiavely) to advances and needs of air or bus?  Even my own automobile is no longer cheap to maintain as I can't do the normal upkeep on it myself anylonger because of onboard computers and other high falutten stuff.  So, it all is realative. 

I also get a kick out of our  fear of things being labor intensive.  Then we complain that we have unemployment.  So if a job can be done by a person, and it make something work well and correctly, then why not employ a person to do the job?  We contradict ourselves all the time on this.

 

Apparently rail cars are more expensive than alternatives.  A particular airplane maintenance task may be costly, but not when it is spread out over the large number of passenger miles a fast-travelling airplane covers.  A while back when we had the big 'tis 'taint argument about whether one could compare the staffing of Beech Grove with that of Norfolk Southern's main maintenance place, I did a back-of-the-envelope calculation on the numbers that were presented, and passenger trains require multiples of the maintenance per passenger mile of aircraft.

I mean, tell me it is different.  Tell me Southwest purchases a 737 jet for X dollars, it takes Y dollars to operate it, and that jet generates Z passenger miles.  Do the same for me on an Amtrak train set.

Tell me I am just making this up.  Tell me why Southwest more or less covers their operating cost on that jet out of fares where as Amtrak needs 21 cents/passenger mile to make up the difference?

As to maintaining an automobile, your automobile has a computer, and a computer-reader (called a scan tool) can be connected to a plug right underneath your steering wheel.  A scan tool can be purchased from any auto part store.  It gives you a number, and you can look up what that number means, and then you can log on to the Internet to forums for cars as Kalmbach runs this forum for train and model railroad questions to get a better idea of what is wrong than your dealer service people.  The only hard thing about fixing a car is everything is so tightly packed in these days (shades of the Pennsy T1) that it requires Harry Houdini to get at it.  I am thinking about opening a service place and hiring slender women with skinny arms and small hands to work on the cars.

What is this kick you get our of a fear of labor intensive?  You can throw all the labor hours you want at a problem if 1) you are willing to employ slave labor (i.e. China) or 2) subsidize the heck out of a thing.  The idea of not making something labor intensive is that you can pay what they call in the biz "a living wage" to people instead of starvation wages.  The U.S. has a high cost for even the basic necessities meaning wages are high unless you are exploiting people for their youth, lack of experience, or lack of immigration documents, which means labor intensive doesn't fly anymore.

[henry6]

My point about labor is that American business and society lauds automation and eliminating labor in any given industry then cries that there is so much unemployment.  So, is the lack of employment and decreased ability to buy products worth industries' laying off people since they don't have a market to sell to?  This may sound harsh on one hand, but it is a problem nonetheless and an increasing one at that.  I am just pointing out the irony.

[schlimm]

Although a lot of what Paul M. says is spot on, his continued reference to the subsidy of  21  cents per passenger mile needs to be put in context. 

In the Amtrak Monthly report for Jan. 2011, the facts are these (quite different) from Paul's continued inaccurate assertions about how high Amtrak costs are):

                        Revenue in cents per passenger mile

Acela                        24.6

Regional NEC          0.1

Short Distance      -11.6

Long Distance       -22.9

Overall                     -10.5

So the overall loss per PM is half of what was claimed.  Perhaps he was referring to the LD trains?  As one can see, if we strip out the long distance trains and focus on shorter corridors and the NEC. Amtrak comes close to covering operating expenses.  Labor expenses in terms of wages still seem rather high, but would be cut considerably by elimination of the extremely labor-intensive long distance cruise trains.

OK, so if we include depreciation and interest system wide (not available for specific routes or categories), then we get a loss of 21 cents per passenger mile.  However, most of the discussions have assumed coverage of above the rail OE as Amtrak states.

 

[Deggesty]

Deggesty

Without looking at a Passenger Car Register, I would say that the 2100 and 2200 series cars were 14 roomettes & 4 double bedrooms, and 11 double bedrooms. The Crescent sleeper-lounges and the observation cars may also have been in one series or the other.

I recall seeing the Southern sleepers with "Southern" on the letterboard, and "Pullman" over the doors.

A little more information on the numbering of the Southern sleepers: The 14-4 sleepers were in the 2200 series; the Crescent lounge cars and the 11 bedroom (rebuilt from 6 bedroom observation buffet lounge) cars were in the 2300 series; the 11 bedroom cars may have been moved to the 2100 series after the rebuilding. 

 

[Anonymous]

In FY09 Amtrak had a net operating loss of $1,264,355,000.  Passenger miles were 5,897,441,000.  The loss is covered by federal and state subsidy payments.  Dividing the net operating loss, which includes fully allocated operating expenses, depreciation, and interest, as well as adjustments, results in an average system loss of 21.44 cents per passenger mile.  The average loss (subsidy) per passenger was $46.54. 

In FY10 the net operating loss was $1,335,449,000.  Passenger miles were 6,320,740,000.  The average system loss per passenger mile was 21.13 cents.  The average loss (subsidy) per passenger was $46.15.

The average operating losses for the NEC, when they were incurred, were smaller than the average losses for the system as a whole. However, if Amtrak allocated depreciation and interest to each route, which it claims that it cannot do because it does not have the required methodology, although it is working on it, the NEC, including the Acela, would show substantial losses for each annual accounting period.  Most of Amtrak's depreciation and embedded interest charges lie in the NEC.  They were incurred to support the higher speeds associated with Acela operations.

Some folks seem to think that only the above the rail or operating results count.  Unfortunately, this is not true. A business must recapture all of its costs, including depreciation, interest, extraordinary items, discontinued operations, etc., if it is to stay in business. Unless of course it is not a real business!

 

[Paul Milenkovic]

Sam1

Some folks seem to think that only the above the rail or operating results count.  Unfortunately, this is not true. A business must recapture all of its costs, including depreciation, interest, extraordinary items, discontinued operations, etc., if it is to stay in business. Unless of course it is not a real business!

Well then, passenger rail is not a real business.  Neither is highway transportation, or national defense, or a whole lot of other things.  Or regulated electric power companies where many rural customers are in effect subsidized that they have electric service at all.

On the other hand, I suppose with RFID tags, we could go over to a system of demand charges on roads.  One of my brick-and-morter rail advocacy community friends claims that in the absence of cross-subsidy, "There would not be a road built in this state north of U.S. 10 (the road that connects Green Bay with St Paul)."  Dunno, don't know if I am ready for that, but maybe we should have gone that route, leaving the vast expanses of even today sparsely populated portions of the U.S. as reserves for all those -- religious minorities, Native Americans, and others chosing to live according to traditional ways -- who would chose to live beyond where the roads end.  Maybe a complete demand-charge system would alleviate traffic jams.

But until we enter the Libertarian Promised Land, there are many institutions and services that are not provided according to business principles, of pay your way or die.

I am of the mind that we have such institutions and services and always will, and that they should be run effectively.  There is a segment of rail advocacy (or many other advocacies) that are of what I call the "just give use the money" school.  Trains are brimming with such social goodness that we should just pay whatever money it takes to have them.

I am of the mind that there are social reasons for having trains, we will be subsidizing trains, but that it is reasonable to apply benchmarks, standards, cost controls, what have you, to see to it that they run efficiently.  Yes, when trains are no longer a real business , then you start using all kinds of made-up benchmarks for their effectiveness.  It is kind of like LEED, this "Green Building" thingy, where since you cannot use strict dollars and cents as a metric, you have this complicated scoring system of whether wood counts as a renewable or counts as a pillaging of the natural environment, when in the end you could charge costs against activities that harm the environment and simply build to the lowest cost.

And speaking of green building and LEED, the electric power industry is not a real business because they are tied up in that.

So.  (clearing my throat from the lingering cold everyone around here has)  Breaking even on "direct operating cost" or "above the rail cost" is one of these funny, LEED-ee, non-business, non-Libertarian metrics.  But passenger trains come up way short on covering those costs, which suggests to me that not only is there no "business case" for trains, the "something other than a business" case for trains is also weak.  I still think that covering such costs is a good benchmark for passenger rail, and I defend this both against the Libertarian argument that everything should be a business and against the "just give us the money" argument that trains are worth whatever money it takes.   Even a non-profit or a governmental function has to satisfy some standard of wise use of money.

 

[henry6]

Then the question isn't "why do anything?" but "why do anything unless somebody makes a profit?".   And if that is the case would Christopher Columbus ever have found the "new World"?  Ok, there was a profit incentive even with that as there was a search for a better and faster trade route to the Far East from Europe which would have enriched whoever controlled it.  Which means that total private enterprise has never happened because somewhere along the line some government  or government type has put up the money and wherewithal to make something happen.

 

[HarveyK400]

[Paul Milenkovic]

henry6

Then the question isn't "why do anything?" but "why do anything unless somebody makes a profit?".   And if that is the case would Christopher Columbus ever have found the "new World"?  Ok, there was a profit incentive even with that as there was a search for a better and faster trade route to the Far East from Europe which would have enriched whoever controlled it.  Which means that total private enterprise has never happened because somewhere along the line some government  or government type has put up the money and wherewithal to make something happen.