News Story

Amtrak Subsidies vs. Megabus Private Enterprise

Amtrak made statewide news recently with its announcement that it has set ridership records in Michigan. But one frequent critic of rail transit says that isn’t necessarily a good thing.

Wendell Cox, a public policy consultant with Illinois-based Demographia, says that Amtrak is a far more costly option when compared to Megabus, a private bus service that launched in April 2006 and operates in about 50 major cities.

For example, Amtrak reported that its Detroit-to-Chicago rail service, known as the "Wolverine," had a 4.9 percent jump in usage. 

If someone were to purchase an Amtrak ticket for a Nov. 7 trip from Detroit to Chicago and then return the same day, the cost would be $32 each way, or $64 round trip. But Cox cites a 2008 study by the Pew Charitable Trusts that reports Amtrak lost $55 per rider on each leg of the Detroit-Chicago route. Cox says that’s $110 per roundtrip that taxpayers subsidized in 2008.

By comparison, the same roundtrip from Detroit to Chicago and back again on Megabus would take two extra minutes each way, but the Megabus roundtrip ticket costs $25.

Cox said Amtrak subsidies are hard to track, but judging by the Pew study, the Amtrak subsidy for one passenger could fund more than four passengers on Megabus on the Detroit-to-Chicago roundtrip.

“High quality bus service, featuring on-board high speed wireless internet, costs passengers less between Detroit and Chicago and takes about the same time,” Cox said in an email. “There is a big difference, however. Train riders are subsidized by taxpayers, while bus riders pay their full fare. In a nation that needs to cut unnecessary spending, Amtrak should be at the top of the list.”


See also:

Train Station with 78 Daily Riders Gets $1 Million in Stimulus Renovations

Transit Authority: $1 Million Deficit, Highest Paid Executives

Derailed: Michigan Should Heed Greece's Experience with Light Rail

SEMCOG's Crazy Train: What happened to the last $3 million Detroit/AA rail study - Mackinac Center

Randal O'Toole (Cato Institute) discusses High Speed Rail

The Detroit People Mover Still Serves as "a Rich Folks' Roller Coaster"

Cut Train Subsidies to Re-connect Rural Michigan