D. Dowd Muska


Throwing Amtrak Under the Bus

July 19, 2012

Joseph P. Schwieterman knows how to spot a trend.

As director of DePaul University’s Chaddick Institute for Metropolitan Development, the professor has spent the past few years documenting a phenomenon that no one predicted: The revival of intercity buses.

Megabus, BoltBus, and other scrappy start-ups have changed the way millions of Americans move around. Last year, the Cato Institute’s Randal O’Toole explained the companies’ innovative strategy: “Under the old model, bus companies maintained stations on expensive downtown real estate, complete with ticket agents, waiting rooms, and baggage handlers. Under the new model, tickets are mostly sold over the Internet, buses pick up and drop off passengers at a curbside, and drivers handle the baggage.”

Internet access is offered by the new carriers, which helps explains why 48 percent of their customers are between the ages of 18 and 25. Another advantage: Nonstop travel. Older bus lines (Greyhound, Trailways, Peter Pan) often make stops between destinations. “Curbside” providers prefer speed -- they establish hubs and radiate routes outward. Megabus’s Pittsburgh service, for example, offers direct passage to Columbus, Ann Arbor, Morgantown, Akron, Cleveland, New York City, Philadelphia, State College, Harrisburg, Frederick, and Washington, D.C.

Schwieterman found that in 2011, “intercity bus operations grew by 7.1 percent … illustrating that an upturn has occurred in a sector that was already experiencing brisk growth at the end of [2010].” There’s a revolution afoot, the professor believes: “The growth of the intercity bus network … reflects a continued change in the dynamics of American transportation that began [in 2006.] The level of investments in new routes seems remarkable when juxtaposed with the modest changes in passenger-carrying capacity of other modes. Arguably, the explosive growth of curbside service has been the most significant change in downtown-oriented long-distance travel in more than a half-century.”

Gadzooks -- riding the bus is cool again. That prompts a question: Why does Amtrak still exist?

The National Rail Passenger Corporation, which began its 42nd year on May 1st, is as insolvent as ever. In fiscal 2011, which ended on October 1, the railroad raised $2.7 billion in revenue -- a figure that included subsidies from state governments. Amtrak spent almost $4 billion, leading to a net loss of $1.3 billion. In the four decades of its shoddy, spendthrift existence, it has soaked up $40 billion in forced taxpayer generosity.

O’Toole’s invaluable book Gridlock: Why We’re Stuck in Traffic and What to Do About It crunched the data on highways, airlines, and rail. Road subsidies amounted to a paltry 0.6¢ per passenger mile, and flying wasn’t far behind, at 1.3¢. Amtrak, with its overly generous union contracts, bloated bureaucracy, and unwillingness to economize, dunned taxpayers for an appalling 28.6¢ per passenger mile.

Apologists claim that Amtrak is an important component of the nation’s transportation infrastructure, and thus heavy subsidies are warranted. (If anything, Washington’s too stingy!) The numbers indicate otherwise.

In its latest annual report, Amtrak boasts that last year, it “set a new ridership record, carrying nearly 30.2 million passengers.” Sounds like a lot of bodies -- but examine the alternatives. All by its lonesome, Hartsfield–Jackson Atlanta International Airport processed 82.6 million domestic fliers in 2011. Motorcoach journeys of all kinds -- charter, scheduled, sightseeing, etc. -- annually carry hundreds of millions of trip-takers.

The bulk of Amtrak’s “business” is along the population-dense Northeast Corridor (NEC) and in short-haul routes “in California and the Pacific Northwest,” as well as “the Chicago Union Station hub in the Midwest,” and “extensions of Northeast Regional trains continuing outside [the] NEC.” The long-distance trains so beloved by nostalgists attracted just 14.9 percent of customers in 2011. If Amtrak’s coast-to-coast runs disappeared, aerophobes and tourists would suffer. Most rail riders would simply use a different conveyance to reach their destinations.

Schwieterman’s statistics, and frequent press coverage, reveal that buses as a replacement for rail isn’t wishful thinking. Options continue to proliferate. In May, Megabus announced plans to expand into Texas and California. BoltBus now offers service between Portland and Vancouver. The Seattle Times’s travel writer compared the company to Amtrak. “[W]hen it comes to overall 21st-century convenience,” she concluded, “BoltBus is the winner.”

Mitt Romney has pledged that if elected, he’ll get Amtrak off the dole. It’s probably another empty gesture -- GOP fedpols promise budget cuts, but rarely deliver. But in light of the rebirth of intercity buses, President Romney will have more than enough ammunition to fire at America’s Soviet-style railroad. Not only is Amtrak unaffordable, but something better has come along.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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