By Andrew Selden
President, United Rail Passenger Alliance
Last summer, as a concession to congressional pressure to reduce the reported losses on its food services, Amtrak instituted what it called an experiment, by removing, effective July 1, 2015, the dining car (along with its associated labor costs) from trains 91 and 92, the New York-Tampa-Miami Silver Star. To make good the loss of meal service to its sleeping car passengers, since Amtrak’s sleeping car fares elsewhere include “full meal service” in a train’s dining car, Amtrak also reduced sleeping car fares on the Silver Star by about 25% during the experiment. The notional premise of the experiment was that passengers who valued meal service highly could instead book their travels on the faster (because it omits the dogleg to Tampa) Silver Meteor, which kept its diner.
The food service on the Silver Star was restricted to the typical, unenhanced, packaged food offered in the lounge car at inflated Amtrak prices. Hot dogs, hamburgers and various cold sandwiches do not constitute “meals” in the minds of most sleeping car passengers. Because Amtrak also did not add crew to the lounge car, lines at mealtimes were long and slow. Riders reported many out-of-stock situations as trips progressed.
The average trip length on the Silver Star is about 550 miles, which covers two and somethime three meal periods. Passengers are captive during these trips, as stations do not offer any meal service, carry-on options are severely limited, and few delivery services will even accept an order that requires them to intercept an Amtrak train with its uncertain timekeeping.
The results (from fiscal year 2015, which ended September 30, 2015) appear to reflect pretty clearly what passengers thought of Amtrak’s initiative. Keep in mind that the diner went missing only for the last 90 days of the fiscal year, but the results are still quite dramatic. In a year when Amtrak’s system ridership was down slightly overall, the Silver Meteor, with its dining service intact, lost 0.6% of its ridership. The Silver Star, less its diner, fell an amazing 12.4%.
The experiment was flawed strategically and tactically, from the beginning. Rider reports consistently revealed that non-railfan passengers were mostly unaware of the loss of meal service. Some were not aware even that they should have had a fare reduction or refund on previously-purchased tickets. Complaints to on board crew and conductors were widespread.
The experiment happened to affect a train that serves the congressional district of one of Amtrak’s loudest congressional critics. It seems unlikely that this is a coincidence.
Amtrak has no means to monitor or understand the actual financial results of the experiment, apart from the crude proxy of collapsing ridership, because its internal accounting system does not and cannot track the specific, actual, costs of any given activity, including a given train’s food service, and associate those costs with the activity’s own revenue stream. Instead, Amtrak’s system accumulates all food service costs into a national category total and then allocates shares back out to various trains in accordance with secret algorithms set by management. The system is unaudited, and not compliant with generally accepted accounting principles. Thus, the reported (i.e., allocated) shares of system foodservice costs assigned to trains 91/92 might be slightly less than they otherwise might have been, but the reported costs are not the Silver Star’s actual costs, and do not measure the results of the cessation of dining car service. Allocation reports are not statements of profit and loss.
The accounting conundrum, however, may be even worse. Amtrak ordinarily transfers about 10% of each sleeping car fare to its dining account, to “pay for” the meals taken in the diner by the sleeping car passenger. On the Silver Star, no such transfer will occur, causing the foodservice account’s revenues to decrease by an amount that may (or may not; no one can be sure because no one knows authoritatively) exceed the avoided labor, food and related costs of the missing dining cars. Thus, the transportation revenue account for the Silver Star will be reduced by 25% on once-lucrative sleeping car fares at the same time that diner revenues are reduced by loss of the 10% transfer, and Amtrak’s systems cannot accurately track any of it.
But based on the reported ridership on the Silver Star, passengers can tell, and are staying away in droves. It is unlikely that a significant proportion of the Silver Star’s sleeping car passengers transferred to the Silver Meteor for the simple reason that the sleeping cars on the Silver Meteor were, and remain, substantially sold out. Amtrak also did not increase sleeping car capacity on the Silver Meteor to accomodate passengers who might have tried to book away from the Silver Star, thus further invalidating the “experiment.”
It may be easier to understand the removal of the dining car from the Silver Star as an act of political petulence or revenge rather than as a business initiative. Before the end of 2015, Amtrak announced that it was extending the “experiment” from its original ending date to April 30, 2016, thereby inflicting the loss of dining car service throughout the winter peak traverl period to and from Florida. This seems to be consistent with Amtrak’s apparent interest in riling up as many customers as possible, one hopes in order to demonstrate that the experiment was a failure.