Freakonomics posed the question to a panel of experts:
Amtrak’s ridership and revenue has been steadily increasing over the last 10 years, and 2011 set a new ridership record with 30.2 million passengers, and $1.9 billion in ticket revenue. But, even though it took in $1.42 billion from Congress last year, it still manages to lose $1 billion annually.
Stephen Smith's conclusion on the privatization front:
The Northeast Corridor is an obvious candidate for splitting off and selling, because it’s both the most profitable route, and the only one whose tracks Amtrak actually owns. The rest of the network will almost certainly need subsidies to survive, although popular routes like those in California should be further separated from inland services, so that in case they are seen as profitable in the future, they won’t be held back by the morbid routes away from the coasts and major cities.
Yglesias thinks profitability needs to be defined:
Is the idea that Amtrak ought to operate the way a for-profit company would and not operate any services that don't earn positive cash flow? Or is the idea simply that Amtrak should earn a sufficient operating surplus from some lines to generate the necessary subsidy to discharge its public service obligations? Or is the question whether Amtrak can be turned into something that earns a reasonable rate of return on its capital investments? Or something in between?
(Photo by Flickr user pheanix)
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