How Much Per Driver Did US Freeways Lose?
A study that is getting a fair amount of coverage online today is that from the Pew Economic Policy Group, which shows Amtrak “lost $32 per passenger in 2008”. The full report breaks it down route by route, showing that only a few routes generated surpluses in 2008, including the only high speed rail route in the Amtrak system, the Acela.
One might see that as a positive sign for high speed rail, proving that it won’t experience the same kind of operating losses the other Amtrak lines tend to produce. Already some are arguing the report should produce further support for HSR at the expense of other Amtrak routes.
Unfortunately, the report these analyses are based on is deeply misleading and should not be used by anyone to set passenger rail policy or transportation policy.
The number one flaw of the Pew report, by far, is it does not compare 2008 numbers to previous years. The report merely examines Amtrak route performance in 2008 alone. As you all remember, 2008 was a rather interesting year for American transportation. Most passenger trains – from Amtrak to the local subways and streetcars – experienced significant spikes in ridership as a result of the spike in gas prices.
Any study of 2008 passenger rail that does not take into account these effects is not credible. At all. And a study that doesn’t even compare to past years is a joke.
Let’s look at a California Amtrak route that DOES publish such credible studies – the Capitol Corridor. Below are excerpts from their 2008 Annual Performance Report, available at the link in the previous sentence.
These charts show a steady increase in both ridership and revenue on the Capitol Corridor, even before the 2008 spike. When presented in context, you see a successful service. Compare that to the Pew report, which took a snapshot of a single year, out of context, pointed out “loss per passenger” that makes Amtrak look like a failure.
This chart is even more impressive and significant. It shows that state subsidy levels (Capitol Corridor is funded by the state of California) have remained pretty much static for the last eight years, yet the Capitol Corridor has had dramatic success at growing ridership and bringing its costs under control.
Eugene Skoropowski, managing director of the Capitol Corridor Joint Powers Authority, presented these charts to the NARP/RailPAC meeting in San Carlos last Saturday. He noted that the 2009 numbers to date show about a 10% decline in ridership from the 2008 highs, but that they’re still above FY 2006-07 in terms of revenue and riders.
These numbers paint a very different picture than the flawed and ridiculous Pew study. Amtrak routes have experienced steadily growing ridership since about 2002, and have witnessed improving farebox recovery rates. Further, since we know that the price of oil is merely in a temporary respite and will rise again once economic recovery returns, we can expect Amtrak to continue on a positive upward trend of increasing ridership and increasing financial returns on investment.
And yet that doesn’t get at the other enormous problem with the Pew study, which is conceptual. Has Pew done a study of the loss per driver of US freeways?
As anyone who has driven in the Bay Area recently will attest, traffic is much lighter on freeways as a result of the recession. This phenomenon can be found nationwide. So how much money have American freeways lost per driver in 2008? In 2009? What is the trendline?
The Pew study is reinforcing a deeply biased and illogical concept, that passenger rail has to be held to standards of “profitability” that we simply do not demand of our freeway network. As Skoropowski noted at the Saturday meeting, federal highway funds were given to states with a requirement that states pay the ongoing maintenance costs. That money is supposedly paid out of gas taxes, but neither the state nor the federal gas tax has been increased in nearly 20 years. As we expand freeways and as Californians in particular conserve fuel through driving less and buying more efficient cars, the gas tax is less effective in paying these costs, requiring, yes, government subsidies. And of course, nobody has ever once proposed paying back the $425 billion (in 2006 dollars) it cost to build the system.
In short, Pew’s study is intended to make Amtrak and passenger rail in general look like a bad investment, when in fact it is anything but that. Sure, the numbers from the Acela prove that HSR will generate revenue, but that’s not why we support high speed rail. HSR advocates should condemn this flawed study and resist the temptation to use it to bolster our already strong case for HSR.