-- Published: Tuesday, 10 June 2014 | Print | Disqus
By Ann Pringle
Leisure was last weekend’s theme, I spent it in a canoe—a cheap and energy-efficient way to see the Everglades, though not at all speedy. That was fine—I just wanted to see alligators in their natural habitat, enjoy a frosty beverage with good company, and return to the city with my limbs intact. My nature-sighting report: zero panthers, one alligator, and one black bear.
Now, had I needed to go from here to there in the swamp, an airboat or swamp buggy would have worked better, or so the locals said. However, when you’re not rushing, old-time means of transportation like canoes and trains add to the adventure. There’s no harm to indulging in that nostalgia—though when Congress forces you to pay $45 billion so “the public” can do the same, it’s a problem.
A $45 Billion Affair Sours
The US has a 44-year-old mistress, and her name is Amtrak. Since its inception in 1970, the National Railroad Passenger Corporation (Amtrak) has received about $45 billion in federal subsidies, according to the Congressional Budget Office.
Amtrak loses money year in and year out despite these fat subsidies (or likely because of them). The company’s operating loss for fiscal 2012 was the lowest since 1975: $361 million. Yes, that means Amtrak actually found a way to lose more than $361 million each year for almost 40 years running.
The Amtrak lobby is quick to point out that in total dollars, air and highway travel receive far more from the federal coffers. True enough. However, on average an American will ride just 20 miles on Amtrak each year. 20 miles!
Per passenger mile, Amtrak is far and wide the most heavily subsidized transportation system in the US. According to a 2012 Cato Institute study by senior fellow Randal O’Toole, from 1995 to 2007 Amtrak’s federal subsidies per passenger mile were 9 times greater than those to the airlines and 22 times greater than our highway system’s.
It’s no surprise these subsidies haven’t made train travel cheaper. Per passenger mile, inflation-adjusted airfares dropped 50% from 1960 to 2010. Meanwhile, Amtrak fares rose 70%. As O’Toole mentions, it’s pretty remarkable that during a period of rapid technological advancement and reduced costs for privately funded transportation, Amtrak has done such a shabby job of controlling costs.
One runaway cost is so absurd, it will baffle anyone who’s spent $6.25 on a ballpark hotdog and washed it down with a $5.75 Coke. From 2002 to 2012, Amtrak’s food service operation lost the company, ahem, I mean lost taxpayers $834 million.
Ted Alves, who resigned as Amtrak’s inspector general in February, testified to Congress last year that the $72 million in food-service losses in 2012 alone stemmed predominately from meals on long-distance routes. Free wine is part of the problem, as multiple long-distance routes include complimentary wine gatherings for sleeper-car passengers. Who knew you were buying so many people drinks?
In short, Amtrak can’t make a dime selling food and drinks to people who are literally stuck on a train with no other option. A privately owned and operated company could turn that problem around with a 10-minute lesson from any ballpark concession worker.
If you’re not irked yet, get ready. Last March Amtrak launched #AmtrakResidency, a writer residency program “designed to allow creative professionals who are passionate about train travel and writing to work on their craft in an inspiring environment.” Up to 24 writers are being selected for 2- to 5-day “residencies,” meaning free meals and long-distance travel, through March 2015.
Answer two probing questions in 2,000 words or less and you, too, could be a contender:
- Why do you want a #AmtrakResidency?
- How would this residency benefit your writing?
Too bad the rickety tracks make writing on Amtrak next to impossible.
There’s not much to redeem Amtrak. Its trains are less energy efficient than inter-city buses. It doesn’t provide an invaluable service to the poor, who generally take that cheaper, more energy-efficient bus if and when they can’t snatch up cheap airfare. And, though subsidy supporters call it an invaluable public service, I can’t pinpoint what that service might be. Free wine for leisure travelers, perhaps?
When Driving Miss Daisy Is Not an Option
Seniors could benefit a great deal from well-run private alternatives. According to the Insurance Institute for Highway and Safety (IIHS), as of 2012, 79% of the US population aged 70 and older still held valid driver’s licenses. That’s up from 73% in 1997, and as the baby boomer population ages, the total number of 70-plus drivers on the road will increase as well.
Unfortunately, they’re not all road-safe. Although overall crash rates tend to decrease with age, the rate of fatal crashes takes an upward spike when drivers pass age 70. While many seniors self-regulate by driving only during daylight and sticking to familiar routes, those who shouldn’t drive but do have limited alternatives.
Short of hiring a personal driver, what other comfortable options do seniors have for inter-city travel? Not every trip warrants a flight, and thanks to the TSA, air travel is now a world-class headache anyway. Plus, in all but a few major cities, the bus carries a certain social stigma I won’t dwell on here. Suffice it to say, middle-class seniors are unlikely to start riding the bus after 50-plus years behind the wheel.
On the other hand, Amtrak’s schedules are haphazard, its stations are bleak and difficult to move through, and its standards of service are spotty at best. It’s too bad, though, because Amtrak should be courting middle-class and well-to-do seniors first and foremost. They have time to travel slowly and discretionary income to spend on comfortable accommodations and polite service.
Furthermore, as long-distance driving becomes difficult or dangerous for the aging boomer population, private passenger trains could help fill the void.
Lessons from the Sunshine State
Among other errors in 2000—recall the hanging chad—Florida voters amended their state constitution to require construction of a statewide network of high-speed passenger trains. That’s right, an actual constitutional amendment demanding trains.
The plan unraveled in 2004 when voters repealed the amendment after learning how much it could cost them: $20-25 billion. However, the state’s train dream didn’t stop there. Construction on the Tampa-Orlando line, phase 1 of the state’s plan, seemed imminent until Governor Rick Scott rejected $2.4 billion in federal stimulus to build the line. Scott cited concern that his state couldn’t afford the project even with the federal funds.
As the brouhaha over a state-funded Tampa-Orlando line continues, All Aboard Florida is planning passenger rail service from Orlando to Miami, with stops in West Palm Beach and Fort Lauderdale. The private company plans to operate 16 northbound and 16 southbound passenger trains beginning in 2016.
It’s still uncertain whether All Aboard Florida, which is being developed by Florida East Coast Industries, LLC—a company with 122-year-old roots—will be successful. About 17% of Florida’s population is over age 65, and the state relies heavily on tourism, so it’s an ideal place to test how much travelers will ride trains when they have to pay the entire fare out of pocket.
What you just read was an excerpt from Miller’s Money Weekly, a free e-letter that provides retirees and people planning for retirement with guidance on saving, investing, and life. To get Money Weekly in your inbox every Thursday, click here.
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-- Published: Tuesday, 10 June 2014 | E-Mail | Print | Source: GoldSeek.com