Trains run by states in Maine and Alaska using private contractors have significantly lower labor costs than Amtrak does with its dining service employees, Alves said. The states pay $7.75 to $13 an hour with no benefits, compared with $41.19 including benefits for an on-board Amtrak employee.
Amtrak, the U.S. taxpayer-supported passenger railroad, is losing tens of millions of dollars a year on food and beverage service even after years of cost cutting, its inspector general said.
Almost all of last year’s $72 million in food-service losses were from providing meals on long-distance trains, Inspector General Ted Alves said in testimony at a House Oversight and Government Reform Committee hearing today. Contracting out some functions has the greatest potential to stem losses, he said.
“Amtrak’s operating losses on food and beverage services have been a long-standing issue, and they contribute directly to the need for federal subsidies to support operations,” Alves said.
The hearing highlights the interest of the Government Operations Subcommittee’s chairman, Florida Republican John Mica, in exposing what he says are wasteful practices at Amtrak.
Alves in his testimony outlined a number of ways for the railroad to reduce waste and cut costs, from contracting out operations to reducing theft and food spoilage.
Amtrak’s Auto Train from Virginia to Florida offers passengers complimentary wine and cheese, and three long-distance routes provide complimentary wine and champagne to sleeper-car passengers, Alves said, costing Amtrak $428,000 in 2012.
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