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Wednesday 22 May 2002

Amtrak and Supply and Demand

Amtrak is famous for losing money nearly everywhere it operates except the Northeast Corridor, the largely-electrified main line between Washington and Boston. And, if you’re familiar with Amtrak, you’ll know that almost all their trains are largely empty — except in the Northeast Corridor. In the Northeast Corridor, it’s not uncommon on some trains to have to sit in the aisle for the whole journey.

One of those overcrowded trains is the Clocker. It’s a train aimed at commuters, operated under a very complicated arrangement with New Jersey Transit.

Anyway, today’s New York Times carries a story about a club car that’s attached to the 5:42 p.m. Clocker out of Penn Station in New York (as well as the 7:59 a.m. service from Princeton Junction in the other direction).

These cars are leased by Amtrak to a private club, the 75 members of which pay $1,200 each in annual dues. Both Amtrak and the club are reluctant to specify just how much this lease costs, but the Times estimates it as “as much as” $70,000 annually. Members also have to pay the normal Amtrak ticket price for each journey; their $1,200 just means that they’ll be able to sit down once they’ve paid.

Ordinary commuters — the ones standing in the aisles — are not happy. They say that the seats should be available to all riders.

But Michael Bonner, the Amtrak official who oversees the Clocker service, said that despite what overcrowded riders might think the club was not taking away precious seats that should be available to everyone first come first served. On Clocker trains, most riders between New York and Princeton have New Jersey Transit monthly passes costing $274 a month. New Jersey Transit pays Amtrak to provide the service to supplement its own, under an agreement that specifies a certain number of cars per day. If the 200 Club did not exist, he said, the club’s extra car would almost certainly not remain on the trains.

[…]

“When the Clocker trains leave here in the morning, we don’t have a coach left in Philadelphia,” Mr. Bonner said. “There’s nothing I can do. I don’t have any more equipment, and they just keep building like crazy out in Jersey.”

The 200 Club is not accepting new members at this time, and Amtrak doesn’t have any cars left to lease you, if you try to start your own club. So you’re stuck.

And this is what’s the matter with Amtrak.

Either this arrangement makes money for Amtrak, or it doesn’t. If it doesn’t make money, Amtrak should either get out of the deal or raise its lease rates. If it does make money, Amtrak should order more cars immediately.

There’s obviously demand for the service — and, if $1,200 a year per seat is enough to pay for another car on the train, it’d be easy to provide it. $1,200 a year is a couple of bucks each way for a daily commuter.

Posted by tino at 15:29 22.05.02
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