What is going on with Auto Train Pricing

[guest_nj_2]

Also, one needs to put the "maximum revenue" concept in the context.

Normally, MAXIMUM REVENUE = if every seat on the train is sold at the maximum possible price.

Does it happen with the current system ? NO.

Let us say

- 50% of train is sold at the lowest bucket of $50

- 30% of train is sold at the medium bucket of $100

- 10% of train is sold in the week before departure for $500

- 10% of train is left unsold

Was the "maximum revenue" achieved ? NO. 10% of seats still went unsold,

and overall 90% of seats was sold below the "maximum possible price" of $500.

So, what is suggested by Amtrak ? Let us revise the bucket prices to $55, $110 and $550

and see what happens. If the same percentage breakdown (50-30-10) holds true, then it's

a "free" 10% of extra revenue **FOR EXACTLY THE SAME SERVICE**.

"Normal" businesses would be scolded for that.

It's OK to charge higher prices commensurate with inflation or if the service level increases,

but not for exactly the same thing as before.

In my example, did the "demand" change ? NO, it stayed the same.

Yet, Amtrak gets 10% extra revenue for the same service.

This does not sound right, even without the "yield-management" nonsense.

 

[Green Maned Lion]

Pullman Standard last manufactured Superliners in 1979-1982. That would make the oldest Superliners 35 years old. None were made by Budd but they too exited the railroad car business around that time. If Amtrak continues to believe that they can keep charging top dollar for a ride on an old rail car with even the basic amenities eliminated, they are mistaken.

That may be a valid observation, but I doubt it. Generally speaking, the older something is, the better it is. And don't you ever forget it.

But in anycase, the only Superliner I's running on the auto trains are the converted Superliner diners rebuilt specifically for the Auto Train in the late 90s for use as a lounge car.

Oh, boy.

Please, nobody argues against the ***DEMAND***-based pricing.

If one train is more popular than the other, charge double for that train.

BUT CHARGE THAT DOUBLE RATE ANY DAY OF THE YEAR, WHETHER IT'S

2 DAYS BEFORE DEPARTURE OR 200 DAYS BEFORE DEPARTURE.

Oh god I can't believe your saying this.

By the way, hotels and amusement parks do *NOT* necessarily charge depending on when you buy.

Hotels mainly differentiate by room type and amenities.

Amusement parks differentiate by the number of days that you buy.

Airlines, yes, they started this "yield-management" nonsense and are widely despised for that.

Oh jesus, you are. Hotels damned well do use that pricing model. AS DOES ALMOST EVERYTHING ELSE. Even stores use that model. You are going to find a winter coat a hell of a lot more expensive in the winter than in the middle of July. I swear to god, if you say one more thing that suggests you think you have any idea whatsoever about how to market or run a business and maximize revenue, profit, and ROI, I am going to drop dead from laughing too much at the inane stupidity of it.

Normally I don't attack specific posters. But you make it so easy.

 

[Green Maned Lion]

Also, one needs to put the "maximum revenue" concept in the context.

Normally, MAXIMUM REVENUE = if every seat on the train is sold at the maximum possible price.

Does it happen with the current system ? NO.

Let us say

- 50% of train is sold at the lowest bucket of $50

- 30% of train is sold at the medium bucket of $100

- 10% of train is sold in the week before departure for $500

- 10% of train is left unsold

Was the "maximum revenue" achieved ? NO. 10% of seats still went unsold,

and overall 90% of seats was sold below the "maximum possible price" of $500.

So, what is suggested by Amtrak ? Let us revise the bucket prices to $55, $110 and $550

and see what happens. If the same percentage breakdown (50-30-10) holds true, then it's

a "free" 10% of extra revenue **FOR EXACTLY THE SAME SERVICE**.

"Normal" businesses would be scolded for that.

It's OK to charge higher prices commensurate with inflation or if the service level increases,

but not for exactly the same thing as before.

In my example, did the "demand" change ? NO, it stayed the same.

Yet, Amtrak gets 10% extra revenue for the same service.

This does not sound right, even without the "yield-management" nonsense.

Sure, we get scolded for that. And we laugh at the wildly misinformed public who tends to perceive the very concept of our business making a profit on selling to them abhorrent. God forbid we make a living. God forbid through hard work and meeting their needs well, we make more than a living. God help us if, after working 90 hour work weeks for a few decades, we can even call ourselves wealthy.

God forbid Amtrak, after being bashed over the head by congress for decades for not running their business like a business and trying to break even on operations, starts to listen to what their bosses tell them to do.

 

[SarahZ]

By the way, hotels and amusement parks do *NOT* necessarily charge depending on when you buy.

Hotels mainly differentiate by room type and amenities.

Amusement parks differentiate by the number of days that you buy.

Airlines, yes, they started this "yield-management" nonsense and are widely despised for that.

Hotels most definitely do change price depending on when you buy. Try buying a hotel room near Navy Pier, for Memorial Day weekend, in November.

Now, try that same purchase in March. Watch the price jump.

Want to see it go skyrocketing down again? Try it the day before your trip, when hotels are desperate to fill rooms.

 

[guest_nj_2]

to GML:

Actually, you *DO* attack other posters from time to time (and seem to be quite fond of yourself).

To conclude (as we came full circle):

- Amtrak is publicly-subsidized and is operating in a noncompetitive environment

- Therefore, it should be judged DIFFERENTLY than a private business operating in a competitive environment (like yours)

- Amtrak employees do NOT work 90-hour weeks for "decades" and do NOT "deserve" to be as wealthy as you are,

especially at the public's expense

- There is a difference between "maximizing revenue" in a competitive environment and non-competitive environment,

which seems to escape most commenters here. In a non-competitive environment it is called "price-gauging".

- If a hotel attempts to charge customers inequitable prices, customers will book another hotel across the street.

With Amtrak, there is no such an option, so customers will just walk away and find another mode for travelling.

This hasn't happened yet (and won't happen overnight) but it will.

And, finally, thanks god that I'm not working for you. Can't stand people that are so pompous just because they have

three letters (M.B.A.) on the business card. Actually, people don't need an MBA to run a successful business.

General business concepts are not a "rocket science" and are available to anyone.

 

[Eric S]

Of course Amtrak exists in a competitive market, unless you define that market as just intercity passenger rail transportation. Define it as intercity passenger transportation, and of course it is a competitive market.

New York-Baltimore too expensive for you on Amtrak? Then switch to BoltBus. Or look at Megabus. Or American/Delta/United.

 

[guest_nj_2]

Yes, $300 roundtrip for NY-BAL is way too much if one can drive for $80 or take a bus for $100.

And if one takes a companion, then it becomes $600 / $80 / $200.

What is the definition of the "waste of money" ??

 

[Green Maned Lion]

to GML:

Actually, you *DO* attack other posters from time to time (and seem to be quite fond of yourself).

To conclude (as we came full circle):

- Amtrak is publicly-subsidized and is operating in a noncompetitive environment

- Therefore, it should be judged DIFFERENTLY than a private business operating in a competitive environment (like yours)

- Amtrak employees do NOT work 90-hour weeks for "decades" and do NOT "deserve" to be as wealthy as you are,

especially at the public's expense

- There is a difference between "maximizing revenue" in a competitive environment and non-competitive environment,

which seems to escape most commenters here. In a non-competitive environment it is called "price-gauging".

- If a hotel attempts to charge customers inequitable prices, customers will book another hotel across the street.

With Amtrak, there is no such an option, so customers will just walk away and find another mode for travelling.

This hasn't happened yet (and won't happen overnight) but it will.

And, finally, thanks god that I'm not working for you. Can't stand people that are so pompous just because they have

three letters (M.B.A.) on the business card. Actually, people don't need an MBA to run a successful business.

General business concepts are not a "rocket science" and are available to anyone.

- From time to time, when they deserve it, yes.

- I love myself. I think I'm the greatest person I could ever be. Damned straight. I'm sorry you are full of self loathing, or a lack of enjoyment of being yourself, or whatever bloody problem you have that makes you think my high self-esteem is a bad thing.

-Amtrak is mildly publicly subsidized at a little under 15%. It is instructed by the subsidizer (the U.S. Government under the direction of Congress with the advisement of the President) to operate itself as if it were a for-profit business. It is doing what it is told to do. Don't like it? Write to your congress critter and say you want the train fares to be cheaper, and expect said congress critter to locate and appropriate funding for that purpose.

-Amtrak employees have nothing to do with this discussion, and why on earth you bring them up is beyond me.

- There is a difference between maximizing revenue in a non-competitive environment. Why you bring this up is beyond me. Nobody has shown any interest in operating long-distance passenger trains. Outside of the middle of certain segments of long distance routes, where Amtrak is the only transportation provider, Amtrak is not in such an environment. The Amtrak has many competitors over most of its routes, and the Auto Train remains, generally, the cheapest option by far for skipping I-95. You could chose to, for instance, fly down and rent a car if you like. Or simply if you own a house in both places, own two automobiles. Amtrak doesn't price gouge- the customer can go elsewhere if they want.

- Thank god you aren't working for me, either. You'd have gone deaf by now.

- I don't generally flaunt my MBA, let alone mention the school I got it from.

- The only three letter abbreviation on my business card is CEO.

- General business concepts aren't rocket science at all. They aren't even common sense. In fact, most of them, applied in the real world, are actually more horse sense then anything else. But you wouldn't know that.

- My pride in my accomplishments doesn't come from any of my degrees. They come from the fact that I started a business with $500 in my pocket and my hat in my hand, and besides stumbling on a nice supplier who has been supportive of my business, built up a quite successful business with a combination of luck and a hell of a lot of hard work.

- I may be pompous (although I tend to prefer 'an ****' as a descriptor myself) but if I am pompous, what are you?

 

[Green Maned Lion]

Yes, $300 roundtrip for NY-BAL is way too much if one can drive for $80 or take a bus for $100.

And if one takes a companion, then it becomes $600 / $80 / $200.

What is the definition of the "waste of money" ??

Listen, if you have full trains, and your company loses money, then you raise prices on those full trains. Its called charging what the market will bear. Don't like it? Don't bear it. Take another form of transportation. Don't want to take another form of transportation? Shut up and pay.

 

[SarahZ]

Yes, $300 roundtrip for NY-BAL is way too much if one can drive for $80 or take a bus for $100.

And if one takes a companion, then it becomes $600 / $80 / $200.

What is the definition of the "waste of money" ??

Listen, if you have full trains, and your company loses money, then you raise prices on those full trains. Its called charging what the market will bear. Don't like it? Don't bear it. Take another form of transportation. Don't want to take another form of transportation? Shut up and pay.

 

[guest_nj_2]

Whatever.

I'm actually *TAKING* alternative modes of transportation now (as I noted in my posts).

If you are content with Amtrak *OPENLY STATING* that it intends to milk you dry and squeeze the last dollar

available from you (even though you are probably among its best customers), so be it. You seem to have money to blow.

Hopefully others are not so content.

 

[tonys96]

Where has GML personally attacked anyone?

Oh, for starters, look at and/or around posts 102 to 111 in this thread right here, among others. That's just for starters........

 

[neroden]

Ok, smart alec. You can't even take a family vacation outside of California in one.

You can't?

*Ahem*. My real-world experience says you shouldn't try.
As a Tesla Model S owner who HAS taken a vacation by Tesla, I can say that Tesla is not really doing its deployment very well. Because of California-centric thinking at Tesla HQ, it will be impossible for me to head west within the US in wintertime *even if the entire planned Supercharger network is built* -- because they are missing a Supercharger in the vicinity of Erie, PA, making it impossible to go between upstate NY and Ohio in winter (the winter range, which is about 2/3 of the summer range, won't get you from one planned Supercharger to the next).

I took my vacation to Michigan by driving through Canada where there are Sun Country Highway chargers. Even this would have been non-viable with the most recent software update, which unnecessarily reduced the charging rate of the car due to crazy paranoia about fires.

Frankly, I would have rather taken the train. The drive was *miserable*, featuring an ice storm, torrential rain, trees on the roads, and power outages. *But you can't get from upstate NY to Michigan by train in a reasonable fashion* because the Michigan trains only go to Chicago. We were going to both Lansing and Grand Rapids, and you can't get between the two by train.

But my assessment is that the Model S is not suitable for a long distance vacation in the next few years. Great for driving a few hours away, though.

Anyway, so much for this diversion into discussion of electric cars.

 

[Ispolkom]

If you are content with Amtrak *OPENLY STATING* that it intends to milk you dry and squeeze the last dollar

available from you

That's what any company does. It gets the highest price it can for its products. Amtrak is not my friend, and it's not a charity. Why should I expect favors from them?

 

[Ryan]

Thanks for your real-world experience, Nathanael. Do you have the 60 or 85 kWh variant?

 

[neroden]

Thanks for your real-world experience, Nathanael. Do you have the 60 or 85 kWh variant?

85. Don't get me wrong -- I love the car, and it's by far the nicest car I've ever driven, to the point where when I get in a gasoline car I go "Why is it shaking and rattling? Is something wrong?"

And despite all the difficulty, the Michigan trip *worked*. It would probably have been nervewracking in a gasoline car too, what with the ice storms and the trees on the road and the power outages. But in particular, despite very careful planning, I was very nervous about charging the entire time (...particularly with the power outages, which luckily didn't hit any of the actual spots I needed to charge at). The currently planned Supercharger deployment is not yet sufficient to alleviate the nervewracking character of a cross-country trip in an electric car in bad weather. It probably will be eventually, since it's just a matter of building more charging points -- apparently in 1900, a cross-country trip in a *gasoline* car was an unreliable journey involving buying gasoline at drugstores.

OK, so I guess that's a little more on the same diverted topic.

 

[rrdude]

Watched a show on Maryland Public TV last night about a couple who did the same thing you did, only over a MUCH SHORTER distance. They drove from Western Maryland, to the Eastern Shore. It was a couple of years ago, but they had "anxious moments" too, trying to get to a "level 2" charger for thief Nissan Leaf.

Made me a convert though. My next car WILL BE ELECTRIC.

 

[Green Maned Lion]

But a Leaf is a basically impractical French car, with all the unreliabulity and bad design that implies. The Tesla is a whole different world of car then the jokes the others have been toying around with. And it's American made with a lot of engineering input and manufacturing advice from backer DBAG. And nobody has more experience building quality automobiles than DBAG.

 

[Bob Dylan]

Electric cars are the flavor of the month right now so all manufacturers are jumping on the bandwagon!

As for the comment about nobody has as much experience with quality cars, there's this mom and pop outfit called Toyota/Lexus that makes the Prius and Lexus vehicles that just might be worth a look! I'm not interested myself since I figure that electricity will become an expensive necessity along with water and I have a Hyundai that gets 40+ mpg and has a 10 yr/100,000 mile warranty that I can drive to California from Central Texas on 3 tanks of gas which is very convienent! YMMV

 

[NW cannonball]

This thread is getting so humorous -- it is to laugh.

Wandering off-topic? Whee-hee!

Fun to watch - yes!

And like Okla Hannali used to say -- It is fun to throw the truth rock and see which hit dogs yelp.

Keep it up!

 

[tonys96]

Electric cars are the flavor of the month right now so all manufacturers are jumping on the bandwagon!

As for the comment about nobody has as much experience with quality cars, there's this mom and pop outfit called Toyota/Lexus that makes the Prius and Lexus vehicles that just might be worth a look! I'm not interested myself since I figure that electricity will become an expensive necessity along with water and I have a Hyundai that gets 40+ mpg and has a 10 yr/100,000 mile warranty that I can drive to California from Central Texas on 3 tanks of gas which is very convienent! YMMV

I have a Hyundai 'Shark' that gets about 38 mpg and looks extra sharp. I agree with you, Jim.

 

[Paulus]

Electric cars are the flavor of the month right now so all manufacturers are jumping on the bandwagon!

As for the comment about nobody has as much experience with quality cars, there's this mom and pop outfit called Toyota/Lexus that makes the Prius and Lexus vehicles that just might be worth a look! I'm not interested myself since I figure that electricity will become an expensive necessity along with water and I have a Hyundai that gets 40+ mpg and has a 10 yr/100,000 mile warranty that I can drive to California from Central Texas on 3 tanks of gas which is very convienent! YMMV

And gasoline won't become more expensive as well? Even if electricity gets more expensive, it will still be becoming cheaper relative to gasoline.

 

[NW cannonball]

But even with really cheap cars, who would want to drive to Florida?

 

[Green Maned Lion]

As for the comment about nobody has as much experience with quality cars, there's this mom and pop outfit called Toyota/Lexus that makes the Prius and Lexus vehicles that just might be worth a look! I'm not interested myself since I figure that electricity will become an expensive necessity along with water and I have a Hyundai that gets 40+ mpg and has a 10 yr/100,000 mile warranty that I can drive to California from Central Texas on 3 tanks of gas which is very convienent! YMMV

Electric cars are the future.

And I said nobody has as MUCH as Daimler-Benz AG. That's not an opinion- it was Gottlieb Daimler and Karl Benz who invented them in 1886.

And the sure build better stuff then they do at Renault.

 

[rrdude]

I posted this over on the Amtrak Pros (they are not) website.

Seems quite appropriate now...