Amtrak's 400% food markup

[crescent-zephyr]

OBS on Amtrak deserves every penny of their compensation. Standing up for hours on moving trains, away from home and family, forced overtime, working holidays, weird work schedules, part of the crew in emergency situations......Its not Applebee's or McDonalds. They deserve more compensation, not cuts in their wages.

Iowa Pacific provides better service for less money.

That statement is debatable. I've ridden Iowa Pacific, Hoosier State, and Pullman from New Orleans. The service is WAY more classy, but "better" is debatable. To be fair, I rode the Hoosier State very early on, but the dining car staff was extremely confused. No one knew who's job was what. One man waited for 20 minutes to get change, and when he asked they could not seem to remember which staff member had taken his money in the first place. It could be this has all been ironed out now, but it also could be this is business as usual as new staff revolves in and out.
Now all the staff was extremely welcoming, and polite. and the service style was great. But I woudn't say it's perfect either.

(The Pullman Dining experience is really hard to compare since it was just 2 tables of guests, 1 waiter.)

Iowa Pacific still has to cover employee lodging at the non-crew base, transportation to the lodging, and loading / unloading of the train. If the employees are full time, they still have to offer insurance and benefits as well. And let's not forget last time I checked Amtrak service attendants start at like $16 an hour... that's not THAT much higher than minimum wage. (Currently $10 in Chicago). So where is all this savings coming from?

I DO think the Iowa Pacific Business model works as far as having a car that earns revenue in multiple ways. On the Hoosier State, one car serves as Business Class, Dining, and Snack Car.

I rode it in December, and the service was well organized and friendly. The food was good to excellent, I was told that their chef choses what he offers on the Blue Plate Special. When I rode, the special was Shrimp & Grits and it was superb. It seems like an example of hire good people, then let them do what you hired them for with minimal interference.
As to their finances, I don't know. They get a relatively fixed subsidy from INDOT, IIRC and have to do everything within it. My guess is they, like the railroads, don't count their food service as a separate profit center, but as a feature to attract people to their service and get their revenue that way. In any case, they have to live or die within their revenue and subsidy.

Good to hear. I hope to ride again soon myself. Service was very friendly when I rode, just very unorganized.

 

[JoeBas]

"Those railroads were before my time but I might look for a book that could flesh it out for me."

Try "The Men Who Loved Trains" by Rush Loving.

 

[Skyline]

I think that may well be right. There are plenty of places that have "self-service" mircowaves.

Yes, like every motel that offers a "free" breakfast near their lobby. Almost always self-serve. Some of those are filthy!

 

[neroden]

"... or there's a giant money-suck somewhere other than their wages. Knowing Amtrak, I'd actually bet on the second option."

Correct. This is from an Inspector General's report I have in my files, c. 2012:

"Our report last year documented long-standing internal control weaknesses and gaps over on-board food and beverage service.

We estimated that $4 million to $7 million of Amtrak's on-board food and beverage sales could be at risk of theft.

Between March 2003 and January 2010, we identified 903 theft, dishonesty, and policy/procedure violations by 306 lead service attendants, and issued 447 administrative referrals to Amtrak managers. The recurring schemes described in the report involve the falsification of documents to conceal missing food and beverage revenues and inventories. Specifically:

• inflating first-class meal checks. This scheme involves adding items to first-class passengers' meal checks---meals are provided free to first-class passengers---and selling these items to other passengers for cash.

• Selling non-Amtrak items. This scheme involves smuggling non-Amtrak items on board trains and selling them to passengers.

• Shorting cash register sales. This scheme involves selling items for their retail value and ringing up smaller amounts, with Amtrak employees pocketing the difference.

• Stealing inventory. This scheme involves directly taking food (rice, oil, eggs, and potatoes) and other items such as complimentary beverages, paper products, and open wine bottles.

• Providing items at no cost. This scheme involves providing customers with complimentary items and providing free drink refills without authorization. Compared with industry best practices, Amtrak lacked

• a loss-prevention unit with dedicated staff to manage loss..."

The sad thing is that even IF Amtrak eliminated ALL of the estimated $4-7 mil of loss due to theft and malfeasance, F&B service would still be tens of millions in the red.

Good grief. But suppose that you eliminate most of this, *and* eliminate most of the time spent by honest OBS doing paperwork, by implementing a point-of-sale inventory tracking system. This makes it pretty much impossible to "ring up the wrong amount". If the customer gets a printout of their order it makes it pretty hard to "add things" to the checks of sleeper customers and not deliver them. It makes it *very* hard to simply steal inventory. Inventory would be checked often enough to spot discrepancies, and more-than-trivial discrepancies would trigger automatic investigations of the crew. Selling non-Amtrak items is a lot harder to catch but again the automatic receipts from the POS system would make it significantly harder.

So if Amtrak eliminated all of the theft/malfeasance losses, that saves $4-7 million. Reducing the amount of time the OBS staff spends on paperwork could allow more customers to be served per day, which could generate significantly more than that -- maybe another $10-20 million. Sounds like a good start, doesn't it?

And point-of-sale systems are available *off the shelf* now. *Every* restaurant has them.

 

[NW cannonball]

What is all this noise about food on Amtrak being overpriced?

I ask ya! Yeah, the staff are overpaid, yeah, the POS is verklutz,

I ask you, compare anywhere else that has a captive clientele -- like an NFL or MLB stadium, or an airline - eh?

The small heat-and-eat burgers on Amtrak? much smaller microwave sandwich at my local gas station, nuke it yourself, may have been in the cooler a week - $3-5. A tiny hot dog at my nearest MLB stadium? 5 bucks. A barely edible strip steak (passed USDA inspection (as "canner and cutter grade" and soaked in tenderizer for a week) at "The Best" steakhouse in the poor part of town? 12.95.

Yeah, Amtrak might do better, compared to some of those examples,

I think Amtrak does marginally OK, considering the costs and difficulties of provisioning a LD train. Could be better, but not a lot better, given the constraints.

You all like the "free market" (not-so-subtle joke) -- well, then, easy profits to be had

Nope, the food ain't likely to get better, you want sit-down, and flowers, and spotless linen tablecloth, and a subservient (well tipped) server, and the meal you really would like? That will be $50-250 and you will have to drive there )or your driver or the EL) , and you might be disappointed. Fact.

But let's keep talking about how to make the neccessarily cheap food more palatable and profitable. I really do like to have decent food available on the train, especially the longer-distance rides.

But all these wannabe restaurant managers, from Rep Mica to here -- hey people, managing restaurants is, uh stressful and low-paid work. For sure.

A few people have devised very successful restaurant chains, asking a railroad to emulate Micky D's or White Castle is totally unreasonable.

 

[Triley]

"... or there's a giant money-suck somewhere other than their wages. Knowing Amtrak, I'd actually bet on the second option."

Correct. This is from an Inspector General's report I have in my files, c. 2012:

"Our report last year documented long-standing internal control weaknesses and gaps over on-board food and beverage service.

We estimated that $4 million to $7 million of Amtrak's on-board food and beverage sales could be at risk of theft.

Between March 2003 and January 2010, we identified 903 theft, dishonesty, and policy/procedure violations by 306 lead service attendants, and issued 447 administrative referrals to Amtrak managers. The recurring schemes described in the report involve the falsification of documents to conceal missing food and beverage revenues and inventories. Specifically:

• inflating first-class meal checks. This scheme involves adding items to first-class passengers' meal checks---meals are provided free to first-class passengers---and selling these items to other passengers for cash.

• Selling non-Amtrak items. This scheme involves smuggling non-Amtrak items on board trains and selling them to passengers.

• Shorting cash register sales. This scheme involves selling items for their retail value and ringing up smaller amounts, with Amtrak employees pocketing the difference.

• Stealing inventory. This scheme involves directly taking food (rice, oil, eggs, and potatoes) and other items such as complimentary beverages, paper products, and open wine bottles.

• Providing items at no cost. This scheme involves providing customers with complimentary items and providing free drink refills without authorization. Compared with industry best practices, Amtrak lacked

• a loss-prevention unit with dedicated staff to manage loss..."

The sad thing is that even IF Amtrak eliminated ALL of the estimated $4-7 mil of loss due to theft and malfeasance, F&B service would still be tens of millions in the red.

Good grief. But suppose that you eliminate most of this, *and* eliminate most of the time spent by honest OBS doing paperwork, by implementing a point-of-sale inventory tracking system. This makes it pretty much impossible to "ring up the wrong amount". If the customer gets a printout of their order it makes it pretty hard to "add things" to the checks of sleeper customers and not deliver them. It makes it *very* hard to simply steal inventory. Inventory would be checked often enough to spot discrepancies, and more-than-trivial discrepancies would trigger automatic investigations of the crew. Selling non-Amtrak items is a lot harder to catch but again the automatic receipts from the POS system would make it significantly harder.

So if Amtrak eliminated all of the theft/malfeasance losses, that saves $4-7 million. Reducing the amount of time the OBS staff spends on paperwork could allow more customers to be served per day, which could generate significantly more than that -- maybe another $10-20 million. Sounds like a good start, doesn't it?

And point-of-sale systems are available *off the shelf* now. *Every* restaurant has them.

I agree all of this will would be nice, but I find it hard to see it happening as flawlessly as you'd hope, for various reasons.

About the POS though... They need one that is rugged because it needs to be able to be transported to/from the commissary, withstand being dropped while doing so, etc, for two reasons. Stock quantities are downloaded/sales figures and records are uploaded at the commissary, currently. The other reason is....possibility of theft. Do you really want us leaving iPads in the cafes/diners, and then leaving them out in the open at layover points, or yards? There's a reason I carry padlocks for layovers in Virginia!

This conversation is all for naught, though. They have long scrapped the plans for version two of the POS that is found on the Acela and (I believe) the Capital Corridor, which is what was suppose to be coming to the Regionals years ago. And they working on an entirely new POS from what I've been told, that is more "normal" size than the phonebook size ones we currently use.

I've made this exact same comment before, so I'll try to keep it shorter it this time. There is way too much customization involved for grabbing an off the shelf unit and throwing it right in the workforce. Our POS units need to be able to track stock levels including condemning/removing stock from counts for reasons other then sales, in addition to being able to note stock back ordered from which commissary and what was actually received, keep track of the temperature logs for the FDA, transfer the stock to another LSA and generate a set of paperwork for the LSA stepping off the train. These are just a few things it needs to do, most of which would be unique to Amtrak.

So there is going to be time working on a solution that works for every cafe, diner and, lounge car in the system. That being said, I completely agree that it needs to happen, and that it can't happen soon enough. The company hasn't turned a blind eye, it's working on it.

 

[VentureForth]

Yes. I'm a broken record with nothing better to say.

Bring on Waffle House and the 24-hour diner.

 

[Triley]

Yes. I'm a broken record with nothing better to say.

Bring on Waffle House and the 24-hour diner.

Did you really have to mention Waffle House? Gah! Us northerners don't have easy access to them, you know!

Sigh...Guess I'll have to gun for a trip to Newport News again soon.

 

[Mystic River Dragon]

Oh, my goodness--not having a clue what Waffle House was, I looked up its menu. It makes Wawa (our local, popular convenience store chain) look like diet food!

Hash browns with toppings? A hash brown bowl?

It sounds wonderful, and after I've dropped about 30 pounds, I'll be down south to check it out!

 

[D.P. Roberts]

I don't think the comparisons to other "captive audiences" (i.e. sports stadiums, convenience stores, etc.) are fair.

In those situations, they charge you more because they CAN, not because they MUST. It's either a monopoly or a convenience factor, and they charge more because people will pay it. And no doubt they turn an enormous profit on the whole thing.

In Amtrak's situation, high prices on the menu could be considered a convenience factor (there's nowhere else on the train to get food), but the fact that Amtrak still loses tens of millions says that it's NOT a convenience issue - they could charge more, and they'd still lose money.

I think the congressional micro-management of Amtrak is at the root of this problem. Many people have brought up POS systems, which would undoubtedly be a good idea. Amtrak would have to spend money to get one, but they would save more than the POS system would cost. However, they aren't allowed to go spend the money to do that.

A lot of Amtrak's commissary costs are fixed. If Amtrak was allowed to run more trains to meet demand (where applicable), they'd probably lose less per meal. But they can't run more trains, because they don't have the equipment - which they're not allowed to buy.

I can't think of any other business where the people nominally in charge of its operation (i.e. Congress) constantly interfere in an attempt to shut the whole business down. Could any company succeed under those conditions?

 

[Triley]

Oh, my goodness--not having a clue what Waffle House was, I looked up its menu. It makes Wawa (our local, popular convenience store chain) look like diet food!

Hash browns with toppings? A hash brown bowl?

It sounds wonderful, and after I've dropped about 30 pounds, I'll be down south to check it out!

Oh hush. We don't have Wawa up here either! Yet another thing I (sadly) look forward to when laying over in Virginia!

Also, the hashbrowns are amazing. Last time I had them scattered, chunked, and smothered. Mmmmmmmmmmm.....

 

[Bob Dylan]

As we say about Waffle House: "It's a Heart Attack on a Plate!"

WaWa sounds like something from a SNL Skit!

 

[JoeBas]

As we say about Waffle House: "It's a Heart Attack on a Plate!"

WaWa sounds like something from a SNL Skit!

I've found that the best WaWa's are usually right near the local Acme (Supermarket Chain). Talk about SNL.

 

[Mystic River Dragon]

JoeBas--Acme is another local traditional store, pronounced by people when I was growing up as "Acamee"--as in "I'm going to the Acamee and then will get a coffee at Wawas."

Bob D.--Wawa is the name of the Pennsylvania town where the original owners had their dairy farm, after which they expanded with their first store. The word "wawa" is the Ojibwe word for the Canadian goose.

Triley--Wawa is spreading like wildfire (opened in Florida outside of a theme park, where it apparently drew a huge crowd for opening day). So, perhaps some will open up north at some point.

 

[Triley]

Triley--Wawa is spreading like wildfire (opened in Florida outside of a theme park, where it apparently drew a huge crowd for opening day). So, perhaps some will open up north at some point.

I looked in to the history of the chain. They tried out some locations in New England and there basically was too much competition is what it sounded like it boiled down to, sooo they closed.

 

[Mystic River Dragon]

Aha. Then, Triley, you will just have to make sure you get some time off in Philly!

 

[Mystic River Dragon]

And, since I have dithered completely off-topic as usual, let me try to redeem myself.

Talking of our various local chains, and remembering the Downeaster has contracted out their café car service and seems to be doing well with that, would there be any possibility of the café car being contracted out to different popular chains in different areas of the country?

For example, whatever local chain is in North Carolina/Virginia takes the café car on the Carolinian, Wawa takes the café car on the Northeast regionals, etc.

I suppose it would be a headache for both Amtrak and the chains, but it seems like a nice idea.

What do you all think? Pros? Cons? Any way this could work?

 

[I always rode the Southern]

I would be not thrilled, about lack of a diner, but content with a Southbound Silver Star cafe menu prepared by Pret a Manger

 

[abcnews]

I don't think the comparisons to other "captive audiences" (i.e. sports stadiums, convenience stores, etc.) are fair.

In those situations, they charge you more because they CAN, not because they MUST. It's either a monopoly or a convenience factor, and they charge more because people will pay it. And no doubt they turn an enormous profit on the whole thing.

In Amtrak's situation, high prices on the menu could be considered a convenience factor (there's nowhere else on the train to get food), but the fact that Amtrak still loses tens of millions says that it's NOT a convenience issue - they could charge more, and they'd still lose money.

I think the congressional micro-management of Amtrak is at the root of this problem. Many people have brought up POS systems, which would undoubtedly be a good idea. Amtrak would have to spend money to get one, but they would save more than the POS system would cost. However, they aren't allowed to go spend the money to do that.

A lot of Amtrak's commissary costs are fixed. If Amtrak was allowed to run more trains to meet demand (where applicable), they'd probably lose less per meal. But they can't run more trains, because they don't have the equipment - which they're not allowed to buy.

I can't think of any other business where the people nominally in charge of its operation (i.e. Congress) constantly interfere in an attempt to shut the whole business down. Could any company succeed under those conditions?

Well said! Worth repeating too...

 

[JoeBas]

JoeBas--Acme is another local traditional store, pronounced by people when I was growing up as "Acamee"--as in "I'm going to the Acamee and then will get a coffee at Wawas."

Bob D.--Wawa is the name of the Pennsylvania town where the original owners had their dairy farm, after which they expanded with their first store. The word "wawa" is the Ojibwe word for the Canadian goose.

Triley--Wawa is spreading like wildfire (opened in Florida outside of a theme park, where it apparently drew a huge crowd for opening day). So, perhaps some will open up north at some point.

I grew up in South Jersey, I know what an Acme is.

As far as the expansion, it works in Florida because of all the Transplants. There's a HUGE one just outside Bright House Networks Field in Clearwater, that gets mobbed every spring. Trying to go to New England, they couldn't break in against AM/PM and Cumberland Farms.

 

[niemi24s]

Is there a Wawa in Wawa? http://www.wawa.cc/ No? Waaaaahhh!!

 

[Mystic River Dragon]

JoeBas--

Sorry, I didn't realize you were from here so would of course know Acme--my apologies .

And yes, I see what you mean about Florida--all those Phillies fans in Clearwater!

niemi24s--

And here I was trying to be a conscientious poster and get back to the original topic!

 

[AmtrakBlue]

Oh, my goodness--not having a clue what Waffle House was, I looked up its menu. It makes Wawa (our local, popular convenience store chain) look like diet food!

Hash browns with toppings? A hash brown bowl?

It sounds wonderful, and after I've dropped about 30 pounds, I'll be down south to check it out!

You don't have to go too far south - we have a few in DE and there are some in MD and PA.

 

[Mystic River Dragon]

I am in trouble, then!

 

[JoeBas]

JoeBas--

Sorry, I didn't realize you were from here so would of course know Acme--my apologies .

No worries, profile says my current home in Texas. My colleagues love it when I talk about going home and getting stuff from Acme, I actually brought back a soft-sided Acme cooler from my trip to OC last summer, and use it for bringing lunch to work, they're always asking if the bag makes the anvil lighter to carry...