Re: Amtrak: Throw Dubious Accounting of Cost Under the Train
Author: mook
Date: 11-30-2012 - 18:57
Amtrak's fully allocated cost formula is probably reasonably accurate in terms of total cost. It's not reasonable when applied to a single hamburger. McD's is much lower because they pay near min.wage, have no benefits, work everybody a min.number of hours, and have the volume to allow good prices on admittedly mediocre ingredients. Amtrak pays a living wage (arguably somewhat higher than a basic one), has reasonable benefits, has regular shifts (staff has to be available most of the time the train is running), and has a fairly low volume of business per train.
A better comparison might be to airline food (priced a hamburger on United lately?) for snack car operations like the ones on the Capitol Corridor or San Joaquins. For the dining cars on long-distance trains, a better comparison would be to coffee-shop operations (that serve dinner) in a hotel, or maybe Dennys or IHOP, or maybe even room service in a low-end business hotel; ummm...$5-10 burgers there to cover the cost of being available at nearly any time for the customer's convenience. Given those comparisons, a supposed $15 burger isn't as far out of line.
Could Amtrak do better? Certainly, but probably not 1) under the work rules required by labor contracts and Federal law; and 2) with as much availability to the captive customers on the train.