Food Service Losses Could Derail Support for Amtrak Subsidies

Florida Republican John L. Mica bristles at the idea of Amtrak partnering with master chefs to upgrade meals on its long-haul trains at a time when the passenger railroad continues to lose tens of millions of dollars a year on its food services.

“Taxpayers would choke if they knew the costs of these gourmet meals,” the chairman of a House Oversight and Government Reform subcommittee said earlier this year. He said “extravagant chef-designed dishes” should “be considered for the chopping block.”

Mica, the former Transportation and Infrastructure chairman, has never been a fan of Amtrak — or its money-losing food services. But the food fight underscores the bigger questions facing Congress over taxpayer subsidies for Amtrak’s national passenger rail system.

Congress is expected to reauthorize rail programs next year. Supporters say the operation needs an infusion of taxpayer investment to upgrade the profitable Northeast Corridor operations and make improvements across the network.

Critics, such as Mica, would prefer to see the railroad scale back money-losing operations, reduce taxpayer subsidies and move toward more privatization. The critics point to the food service operations as an example of how not to run a railroad.

“If you buy a hamburger on Amtrak, it costs the taxpayers $6.65,” Mica said in 2012, pointing to a committee report that found a $9.50 burger actually cost the railroad $16.15. He contrasted the hefty price tag with a deal on the McDonald’s value menu that offered a burger and a soda for a buck.

Amtrak President and CEO Joseph H. Boardman noted that the $9.50 price also included fries and a drink, and he said a $6 hamburger-only option was available on Amtrak’s flagship service between Washington, D.C., and Boston.

Still, Boardman doesn’t dispute the larger point that Amtrak needs to stop losing so much on its food operations — especially as it appeals to a budget-cutting Congress for more public investment.

Amtrak has already made significant strides, cutting losses on food operations to $74 million in fiscal 2013 from $1.05 million in fiscal 2006. But Boardman told lawmakers in October that he was committing “to end food and beverage losses once and for all” on the railroad.

“Our plan will expand initiatives that have worked, add new elements and evolve as updated information and opportunities lead us to better solutions,” he said.

The challenge is finding a way to cut losses on the long-haul trains, which include traditional dining cards outfitted with linen tablecloths and contributed 99 percent of the annual food-related losses. Cafe cars operating along the Northeast Corridor and on some other short-haul routes either break even or make small profits.

Initially, Amtrak is making structural changes, including the consolidation of all food services operations into one department. Currently, dining services on shorter routes and Northeast Corridor trains are managed separately from the long hauls. Amtrak is also updating its point-of-sale systems onboard trains to improve revenue collection and reduce errors and is emulating airlines in testing cashless systems that allow debit or credit cards only.

But even those changes are unlikely to eliminate losses, and there is sharp disagreement about what to do next.

Mica and other Amtrak critics, including Oversight and Government Reform Chairman Darrell Issa, R-Calif., co-sponsored legislation last year that would have forced Amtrak to employ private contractors to overhaul food service operations. The proposal was eventually included in a surface transportation authorization that was never brought to the House floor.

Dwayne Bateman, vice general chairman for the Unite-HERE Local 43, one of three unions representing Amtrak’s onboard workers, told Mica’s subcommittee last month that such changes were impractical because food and beverage workers — like flight attendants — are also front-line safety workers with responsibilities that extend beyond serving meals and drinks.

“These sorts of proposals are simply not credible and they do not offer a positive contribution to any effort to improve Amtrak services,” Bateman said.

Boardman and other Amtrak advocates also argue that the long-distance services need full-service dining options for passengers who may spend several days on a trans-continental train.

Mica and others have pointed to North Carolina’s state-subsidized Piedmont short-haul trains, which connect Raleigh and Charlotte as an example of economizing.

After losing money on dining cars that used to serve hot meals including such regional specialities as barbecue, the state switched to vending machines instead.

But Paul C. Worley, director of the state’s Transportation Rail Division, cautioned that shouldn’t be viewed as a viable alternative for longer trips.

“While the Piedmont’s success story is one that we are very pleased with, we currently rely on Amtrak’s food service on the Carolinian, which is a much longer route that operates through to the Northeast Corridor,” Worley told Mica’s subcommittee. “While do not feel that vending machine service is appropriate for such a long route with average trip lengths of over 300 miles, we do believe there may be opportunities for efficiencies and improved service and products.”