How To Improve U.S. Passenger Rail, Pt. 1

It is an article of faith among many Americans that their nation cannot support a vibrant passenger rail network, because of its lower density compared to Asian and European cities.

But this macro-level statistic obscures that the U.S. has several high-density corridors, with existing tracks, where private, profitable rail travel could work. The lack of service is instead a political problem, rather than a geographic or infrastructure one. In the latter article of this 2-part series, we will describe some of the creative, futuristic ideas to expand rail capacity. But for this first piece, we will focus on something more rudimentary: the deregulation of track usage so that competing passenger train companies can break the Amtrak monopoly. 

Amtrak, our national rail operator, has long been a disappointment to rail advocates. The corporation was created by Congress in 1970 to prevent the full death of the passenger rail industry. Much of the track that Amtrak runs along it doesn’t own—meaning the operator must contend with scheduling around freight trains. In theory it has priority, but in practice this is difficult to enforce because freight companies own much of the track and naturally prioritize their own interests. 

But elsewhere, the tracks are owned by either Amtrak or state governments—including along its busiest routes. The Northeast Corridor (NEC) is owned entirely by either Amtrak or state transportation authorities, and accounts for 36% of the corporation’s passengers and 52% of gross ticket revenue. Amtrak also owns the Keystone route from Philadelphia to Harrisburg, and Caltrans owns the Los Angeles-San Diego line, which is Amtrak’s second busiest. Yet performance is still poor—the Acela Express that runs along the NEC reports a 76% on-time rate since 2016, while Amtrak at large has required over $40 billion in public subsidies through the decades.

Some of this poor performance results from even greater subsidies to driving—the drive from Los Angeles to San Diego is toll-free, for example, despite being one of America’s most congested travel corridors. But we believe passenger rail can still compete with roads as a viable travel mode, and should be given the chance to do so. This would be done mainly by applying competition to the industry. 

In our last Catalyst article, we discussed the success of the “open-access” model in Europe. Rather than allocating track solely to state-run trains, public-private franchises, or concessionaires, some countries allow certain tracks to be leased to any company wishing to operate. This has lowered fares and improved customer satisfaction in Germany and Italy, among other countries.   

There was an attempt to introduce privatized service on the Northeast Corridor ten years ago. Reps. John Mica (R-FL) and Bill Shuster (R-PA) proposed decoupling the Northeast Corridor from Amtrak and allowing private operators. The bill did not advance, however, and the open access concept has not been seriously explored for the NEC, or elsewhere in the U.S.

In the late 1990s and early 2000s, some firms pushed to operate passenger service in the U.S., according to Joseph Vranich, a rail analyst and former advocate for Amtrak expansion. But the government did not show interest, and Amtrak opposed the idea. 

There is some private sector involvement in passenger rail today, in the form of concessions provided to firms like Keolis and Veolia to operate commuter rail systems in major U.S. metros. But these contracts do not allow for much input on behalf of the operator, who are merely paid to operate and maintain trains while delivering a certain standard of service. 

The practical next steps would be to extend this thinking to intercity rail. It may not be politically-realistic at this point to build brand new passenger railroads in the most urbanized parts of America (although this is happening in parts of the less-urbanized Sunbelt, and we will explain next article how it could happen everywhere). But opening up current lines to competition could deliver better provision than now offered by Amtrak. 

State-owned corridors could sell slots on existing intercity rail lines, much like airports sell runway slots to airlines. Operators would be responsible for maintaining their own fleet, and be penalized for delays. In exchange, they would receive full revenues from their service, minus the expense of track access fees.

Amtrak could do the same with the key corridors that it owns. As it is, Amtrak charges freight and commuter rail operators for access to its tracks. There is no inherent reason why it cannot do the same with a private inter-city operator. Such slot bidding would also create a revenue source, which in turn could finance capital improvements such as track maintenance and expansion. Amtrak is already facing a $42 billion backlog on this front. Or, per the advocacy of the aforementioned Congressman an outlets like the Reason Foundation, tracks could be separated from Amtrak and run by a for-profit entity. 

Ideally, this more market-based approach would encourage more service diversity along the NEC and other key lines, while lowering fares and improving the rider experience. That way it can compete with other travel modes that themselves attract lots of government favoritism. 

This is part 1 of a 2 part series on improving U.S. passenger rail. (Read part 2.) The series is being co-authored by Market Urbanism Report content staffer Ethan Finlan.