An audit from Amtrak’s Office of Inspector General reveals the transit system lost $72 million on some of its food and beverage services last year, financial losses ultimately subsidized by federal taxpayers. News4 I-Team's Scott MacFarlane reports.
Even if you’re not riding Amtrak this holiday season, your tax money is.
An audit from Amtrak’s Office of Inspector General reveals the transit system lost $72 million on some of its food and beverage services last year, financial losses ultimately subsidized by federal taxpayers.
The audit, reviewed by the News4 I-Team and the chairman of a U.S. House subcommittee, shows the cost of selling food and drinks far exceeds the revenue Amtrak generates selling food and drinks on its long-distance routes. The Capitol Limited route, which runs between D.C. and Chicago, produced $2.4 million in food and drink revenue last year. But labor to sell food and drinks and other food-related expenses cost Amtrak $2.8 million on the Capitol Limited line during the same timeframe.
A News I-Team review found a cheeseburger, trail mix and soda costs passengers $13.50 in the café car of the Capitol Limited. Using the audit’s estimates, Amtrak lost approximately $15 by serving that meal.
The auditors’ review found Amtrak breaks even while selling food and drinks on its popular Northeast Corridor route, which connects D.C. to New York and other large Northeast cities. But its other long routes nationwide, including its Florida-bound Auto Train and California Zephyr routes, trigger major food sales losses.
Rep. John Mica (R-Florida), a longtime critic of Amtrak’s business plan, told the News4 I-Team, “This is, unfortunately, a government-subsidized bottomless pit operation that has to stop.”
Amtrak’s auditors said overstaffing on some routes, free food giveaways and food “spoilage” contributed to the agency’s food-related financial problems.
Amtrak, in testimony before a U.S. House Oversight subcommittee, said it has greatly reduced its financial losses on food in recent years. Food losses have been reduced by 30 percent since 2006. An agency spokesman, in a statement to the News4 I-Team, said, “We agree with the spirit of the recommendations and expect to finalize a detailed plan by the end of the year that will include an improved management structure, expand use of technology, address staffing issues and explore new pricing and revenue management options.”
Maureen Porter, who frequently rides Amtrak between Pittsburgh and D.C., said the food and beverage sales are an important attraction for passengers. Porter said she’d be less likely to ride, if not for the dining car services offered on her route. Amtrak, she said, serves a larger purpose. “This is infrastructure. It’s everything we need to keep the country connected,” said Porter.
Ridership is surging on Amtrak. The agency said a record 31.6 million passengers rode the system between October 2012 and September 2013.