Could Amtrak Subcontract Dining

[VentureForth]

Could Amtrak contract its Diner car to a third party with the stipulations that they would get $x per sleeper car passenger (regardless of if they ate or not), then ran the dining car at whatever cost they felt necessary to be profitable? They wouldn't even have to kick back to Amtrak because that would still save 'em money.

Have they tried that, like the 24-hour diner, on any route as a trial?

Or would the Unions have a total fit over it and never let it happen?

 

[battalion51]

The Unions most definitely would have a fit. They tried using contract service on Empire Service a few years back and it failed miserably. The only place I'm aware of that an Amtrak train uses contract food service with success is the Downeaster. When you have trains that are moving for days at a time, and crews that are away from home even longer it gets very challenging.

 

[Shanghai]

It looks good on paper, but in reality I don't think Amtrak could improve their profitability by contracting the dining service. It is likely that Amtrak would continue to provide the dining car and its maintenance, so about the only cost savings a contractor could reasonably achieve would be labor and materials (foods). I don't think a contractor could operate with less people, therefore to reduce labor costs they would need to reduce the wage rates. And to reduce food costs, one would have to serve less quanity of foods and/or less costly foods (quality). Amtrak may have to pay or guarantee the contractor an amount equal to their costs to attract a good company.

It might be worth a test case to determine if a contractor could operate the service with greater efficiency and cost performance over the present Amtrak service.

 

[Sam31452]

Sub-contracting is a highly stupid thing to do when thinking about how to make dining car services profitable.

Several railways have tried that in Europe, in Italy and Austria there is still a subcontractor whose losses are paid by the railways, in Germany and Switzerland there have been experminents (including having to competeting subcontractors at the same time in Switzerland) but all failed and nowadays the railways run the food services by themselves again.

If you want to avoid losses you either have to cut the food services (yes, i am speaking of a LD train without diner) and go back a hundred years.

This is working very well on some trains in the former Soviet Union, where the dining cars have a bad reputation anyway. Platform vendors sell all kind of stuff and food at most larger stations instead. The quality of the food is okay, the prices (at least for westerners) too.

Otherwise you just have to raise the prices (if you put in $20 more on a sleeper fare, this won't scare too many customers), but then you have to raise the quality too (and go back a hundred years when a diner was plain luxury)

 

[volkris]

I read that at one point Amtrak contracted out its food service to someone like Quizno's, who was able to integrate the train service with its other operations in the area and thus provide good food at lower costs. The article claimed that everything worked out really well and customers loved it... until a union staged a demonstration en route.

It sounded like this happened on a non-long distance train, as if the deal allowed the restaurant to operate out of a snack car.

Does anyone know about the truth of this account?

 

[MrFSS]

I read that at one point Amtrak contracted out its food service to someone like Quizno's, who was able to integrate the train service with its other operations in the area and thus provide good food at lower costs. The article claimed that everything worked out really well and customers loved it... until a union staged a demonstration en route.
It sounded like this happened on a non-long distance train, as if the deal allowed the restaurant to operate out of a snack car.

Does anyone know about the truth of this account?

I seem to remember hearing about something like this several years ago, but can't recall the details of which trains, etc.

 

[volkris]

Aha:

Press Release

One account of the failure

There were other accounts as well, but this one seemed the most balanced.

Sounds like Subway leased the snack car from Amtrak and agreed to pay Amtrak a portion of the profits. Unions disagreed and staged protests aboard the train, handing out leaflets to passengers. The project was canceled after less than a week.

It sounds like Subway's service was far from perfect--walking through the train selling sandwiches sounds annoying and tacky to me--but then it was canceled before they could even begin to perfect it.

 

[PRR 60]

This is not a new idea. The Santa Fe contracted its dining car service to the Fred Harvey Company. This was the logical extension of the original Harvey restaurants located in prime AT&SF stations.

 

[GG-1]

Could Amtrak contract its Diner car to a third party with the stipulations that they would get $x per sleeper car passenger (regardless of if they ate or not), then ran the dining car at whatever cost they felt necessary to be profitable? They wouldn't even have to kick back to Amtrak because that would still save 'em money.
Have they tried that, like the 24-hour diner, on any route as a trial?

Or would the Unions have a total fit over it and never let it happen?

Aloha

I don't want to debate union positions, but if the company you worked for, wanted to hire another group of workers, to put more money in the company pocket. How would you feel, and what would you do in that situation?

Mahalo

 

[volkris]

I don't want to debate union positions, but if the company you worked for, wanted to hire another group of workers, to put more money in the company pocket. How would you feel, and what would you do in that situation?

At the least I would understand that the company is in business to make money, not to create or protect jobs, and has a responsibility to its various investors to do so. I would understand that this benefits the customers, the contractors, and a ton of other people through the interconnectedness of an economy, even if it didn't benefit me personally. On those grounds, at least, I would be happy for the company.

When Amtrak tried this it went one step better: nobody was replaced or fired, and it wasn't that more money was going into the company's pocket; the move was to keep money from being drained from the company's pocket. The proposal was leading to a healthier company with better customer service with no harm done to any workers. Everyone was to win... except, I suppose, union power structures who wouldn't be overseeing the new employees.

Anyway, as someone who studies economies and watches as unions very often (no, not every time!) gain at the expense of the companies, customers, and even employees it makes me sad how many union members fail to see the bigger picture, that their benefits come with a cost. The worker versus company mentality encouraged by many union heads seems to blind people to the real situation.

 

[jmbgeg]

I don't want to debate union positions, but if the company you worked for, wanted to hire another group of workers, to put more money in the company pocket. How would you feel, and what would you do in that situation?

At the least I would understand that the company is in business to make money, not to create or protect jobs, and has a responsibility to its various investors to do so. I would understand that this benefits the customers, the contractors, and a ton of other people through the interconnectedness of an economy, even if it didn't benefit me personally. On those grounds, at least, I would be happy for the company.

When Amtrak tried this it went one step better: nobody was replaced or fired, and it wasn't that more money was going into the company's pocket; the move was to keep money from being drained from the company's pocket. The proposal was leading to a healthier company with better customer service with no harm done to any workers. Everyone was to win... except, I suppose, union power structures who wouldn't be overseeing the new employees.

Anyway, as someone who studies economies and watches as unions very often (no, not every time!) gain at the expense of the companies, customers, and even employees it makes me sad how many union members fail to see the bigger picture, that their benefits come with a cost. The worker versus company mentality encouraged by many union heads seems to blind people to the real situation.

From my casual observation, food preparation for long distance trains is not a process that would be made more economical through outsourcing because of low relative meal volumes per train and an absence of economies of scale. Airport based commercial kitchens handle infinitely higher volumes. I am not sure that industry giants like Aramark or Host Marriott would touch this type of contract. Absent a national contract you end up with a network of regional or local providers.

 

[ALC Rail Writer]

From my casual observation, food preparation for long distance trains is not a process that would be made more economical through outsourcing because of low relative meal volumes per train and an absence of economies of scale. Airport based commercial kitchens handle infinitely higher volumes. I am not sure that industry giants like Aramark or Host Marriott would touch this type of contract. Absent a national contract you end up with a network of regional or local providers.

Aramark already handles the food on most LD trains, so in a way they are contracted into the system if not this exact position.

 

[Joel N. Weber II]

Could Amtrak contract its Diner car to a third party with the stipulations that they would get $x per sleeper car passenger (regardless of if they ate or not), then ran the dining car at whatever cost they felt necessary to be profitable? They wouldn't even have to kick back to Amtrak because that would still save 'em money.

How would this save Amtrak any money? It seems to me that it would only save Amtrak money if the workers were paid less, there were fewer people working in the dining car, or cheaper food was used, and I don't see how any of those things is ultimately desireable. I certainly don't see how changing which company is running what part of the operation is likely to change the costs unless there's some legal technicality that can be exploited by playing that game.

 

[PetalumaLoco]

How would this save Amtrak any money? It seems to me that it would only save Amtrak money if the workers were paid less, there were fewer people working in the dining car, or cheaper food was used, and I don't see how any of those things is ultimately desireable. ..

Didn't this happen already? With undesirable results?

 

[volkris]

How would this save Amtrak any money? It seems to me that it would only save Amtrak money if the workers were paid less, there were fewer people working in the dining car, or cheaper food was used, and I don't see how any of those things is ultimately desireable. I certainly don't see how changing which company is running what part of the operation is likely to change the costs unless there's some legal technicality that can be exploited by playing that game.

The desirable things are customer satisfaction and profit (or, at least, lack of cost). So long as customers are sufficiently satisfied (and what that means is certainly up for debate), then cheaper food, lower wages, and less staff are very desirable.

I'm a Cajun; we built our entire culture on cheap, very desirable food

It's clear that, for better or worse, the union is hiking the wages of employees, so outsourcing to a company that's not bound to the higher union pay scales is going to lower costs. As someone above pointed out, Aramark is already involved on the back end, so we might as well let food-oriented companies bring the same success all the way to the customer if they think they can succeed.

 

[Joel N. Weber II]

The desirable things are customer satisfaction and profit (or, at least, lack of cost). So long as customers are sufficiently satisfied (and what that means is certainly up for debate), then cheaper food, lower wages, and less staff are very desirable.

Are you trying to maximize the profitability / minimize the subsidy for the sleeping car experience as a whole, or are you focused just on the food service?

It wouldn't surprise me if spending an extra $5 per passenger on food means that more people are willing to pay the higher bucket sleeping car prices instead of taking an airplane or something, which may lead to $20 per passenger or more in revenue for Amtrak.

It's clear that, for better or worse, the union is hiking the wages of employees, so outsourcing to a company that's not bound to the higher union pay scales is going to lower costs.

We have clear evidence of that in the specific case of Amtrak?

I've seen some arguments that UAW has managed to get much higher wages for its unions than competing non-unionized workers make working for other automakers in other states (though I'm not sure I've really seen the underlying data to support this argument from a reliable source), but it's really hard to find an example of non-unionized workers doing work which is similar to the work done by Amtrak's on board service crew.

 

[sky12065]

Without consideration about the feasibility of outsourcing food service on Amtrak, let me offer this one perspective on the outsourcing of food service.

During the 1970's I used to travel the New York State Thruway to be able to march with competitive drum & bugle corps. In the early part of the decade I traveled from the Albany area to Syracuse and in the latter part I traveled to and from the upper New Jersey area.

In returning home after a trying weekend I could stop at a rest area on the Thruway and have a reasonably nutritious meal that was more like the traditional dinner mom used to serve... meaning a protein, a carbohydrate and vegetable type meal. Several years later a major change took place and just about all (if not all) rest areas were completely replaced with new modern facilities, but the days of a balanced meal also became a thing of the past and the era of fast food arose.

Rather than my explain any further, I simply offer this web page of a 1990 article to give you a greater perspective of what outsourcing of food service can result in. http://www.nytimes.com/1990/03/10/nyregion/thruway-to-update-most-restaurants.html I hope something similar to this never happens to Amtrak where fast food may be the only items on the menu!

 

[Anthony]

Without consideration about the feasibility of outsourcing food service on Amtrak, let me offer this one perspective on the outsourcing of food service.
During the 1970's I used to travel the New York State Thruway to be able to march with competitive drum & bugle corps. In the early part of the decade I traveled from the Albany area to Syracuse and in the latter part I traveled to and from the upper New Jersey area.

In returning home after a trying weekend I could stop at a rest area on the Thruway and have a reasonably nutritious meal that was more like the traditional dinner mom used to serve... meaning a protein, a carbohydrate and vegetable type meal. Several years later a major change took place and just about all (if not all) rest areas were completely replaced with new modern facilities, but the days of a balanced meal also became a thing of the past and the era of fast food arose.

Rather than my explain any further, I simply offer this web page of a 1990 article to give you a greater perspective of what outsourcing of food service can result in. http://www.nytimes.com/1990/03/10/nyregion/thruway-to-update-most-restaurants.html I hope something similar to this never happens to Amtrak where fast food may be the only items on the menu!

off-topic, but:

Having taken about ten round trips between Albany and Buffalo on the Thruway over the past year and a half, I actually enjoy the variety and amenities offered by these fast-food travel plazas. They are always clean, and if I don't like the franchises at a particular location, I can just drive half an hour longer and something else will probably appeal. I can also look up specific fare on the Thruway Web site and plan my meal break ahead of time. When on the toll road in the middle of nowhere, with few attractions at the roadside for five or six hours straight, I'd rather have a quick and unbalanced meal that will get me on the road and to my destination faster (where a better meal likely awaits). Amtrak's a little different - the travel times are longer between the same destinations, riding the train is a less active process/requires less concentration than driving a car, it's more leisurely, etc. - and I appreciate a longer mealtime in that environment.

Fast food would be a shame on Amtrak, but I'm not convinced that it's all bad on a controlled-access toll road where the goal is to get from A to B.

 

[volkris]

It's all about customer satisfaction. If some subcontractor can do the job cheaper but only by dropping quality or service so much that it turns customers off to Amtrak, then that's not going to work.

In this case Amtrak found an established, well-liked company willing to bet that it could effectively offer food customers want in a financially positive way, The program was derailed not by bad food or service but by a union looking to protect itself.

At least, that's how it seems from the reports I've read. Anyone who knows different is welcome to correct me, of course.

 

[AlanB]

The desirable things are customer satisfaction and profit (or, at least, lack of cost). So long as customers are sufficiently satisfied (and what that means is certainly up for debate), then cheaper food, lower wages, and less staff are very desirable.

Are you trying to maximize the profitability / minimize the subsidy for the sleeping car experience as a whole, or are you focused just on the food service?

There is no subsidy for "the sleeping car experience", sleeping car passengers pay the fully allocated costs associated with traveling in a sleeper and getting meals in the diner. The only subsidy provided to a sleeping car passenger, is a portion of the rail fare that every passenger on the train pays. Even then, less subsidy is provided to the sleeping car patron's rail fare, than is provided to a coach passenger's rail fare.

 

[George Harris]

This is not a new idea. The Santa Fe contracted its dining car service to the Fred Harvey Company. This was the logical extension of the original Harvey restaurants located in prime AT&SF stations.

If my memory is correct, the shoe started out on the other foot.

Fred Harvey began operating station area restaurants for ATSF before there were dining cars. Fred Harvey dinning cars were an outgrowth of that, so there never was any dining car service on the Santa Fe other than Fred Harvey.

 

[AlanB]

It's all about customer satisfaction. If some subcontractor can do the job cheaper but only by dropping quality or service so much that it turns customers off to Amtrak, then that's not going to work.
In this case Amtrak found an established, well-liked company willing to bet that it could effectively offer food customers want in a financially positive way, The program was derailed not by bad food or service but by a union looking to protect itself.

At least, that's how it seems from the reports I've read. Anyone who knows different is welcome to correct me, of course.

What program was derailed by bad food or service?

Amtrak just switched to Amarak for it's food service. They went to Aramark with several well known chefs and created the menu now found on the LD's and asked Aramark to quote a price. Aramark did, and apparently Amtrak liked it. I know that I like the menu. IMHO it is a significant improvement over the old menus, using the old food service company.

Turning to staffing costs, first I doubt that the workers would say that the union has done a good job at anything. It took them almost 8 years to get a new contract and a halfway decent raise. Next, Amtrak already tried cutting the staff to the bone and learned that it doesn't work. While staffing levels aren't quite back to pre-SDS levels on all trains, on many trains they are, at least when the passenger loads are up.

Finally, while I suspect that perhaps a new company might be able to get away with paying its workers a bit less, they aren't going to be able to find a huge savings that way. One simply isn't going to find workers that will agree to work 15 to 16 hour days, three meals, on a moving bouncing train, who don't get to go home at night and have to sleep on that same moving bouncing train right next to the engine blowing its horn all night long, for 10 bucks an hour.

 

[volkris]

What program was derailed by bad food or service?

The program wasn't derailed by bad food or bad service. That's what I'm saying.

See the links I posted earlier in this thread. Amtrak and Subway entered into a deal whereby Subway leased a snack car in return for giving Amtrak a share of the profit. The service began but was canceled within a week once union members began demonstrating on board the train, passing out leaflets to riders saying that Amtrak was doing very bad things.

Maybe there was another reason for the deal being dropped, but I've never seen it, and it seems unlikely to give up on such an arrangement after only a few days.

 

[Mark]

Yes- the "evil unions" are to blame for Amtrak's woes, in fact the unions are to blame for everything wrong in this country if you ask certain people. Typically people who make these kinds of remarks have never been in a union or worked in a company that actually has union members working there.

First "the unions" should throw a fit if Amtrak tries to contract out the food service. It's their work and they, (whatever union/s the OBS crews belong to), have a contract with Amtrak so when the brass hats come up with another great plan to eliminate this or that in the name of saving costs, management conveniently forgets the contract that they signed with the workers. When the contract is up for renewal, that is the time to negotiate. Amtrak food service can be complicated so it invites the accountants in by its nature to fool with it and try to save a buck. Take SDS or the CCC for example. The "unions" couldn't stop Amtrak from reducing the staff on those trains that have are equipped for those services. Talk to any line employee, they'll tell you its too much work for a full train.

Second, "the unions" on Amtrak and the other major RRs for that matter have substantially less power than most people believe. They can't really strike, Ronald Regan saw to that and if they even get close the Federal Government passes some kind of emergency measure to keep everybody working. Amtrak workers went what, 8 years or so without a new contract? Whose fault is that? Oh yea, the "evil unions" who are responsible for all the bad in this country. I know for a fact, (on at least one RR), that while RR workers are getting laid off by the hundreds if not thousands all over this country not one manager or company official has lost his or her job due to the present economy. The all powerful "evil unions" can't do much about that either.

I agree that some parts of typical union contracts aren't exactly great for either side particularly in terms of flexibility but the "evil unions" were no longer strong enough to stop corporate greed from shipping most of our "blue collar" jobs to China, India and who knows wherever else and look where we are now. America used to be strong, we used to make most everything here and you know what? We had strong unions during those times as well. Coincidence? I think not.

The bottom line is Congress needs to eliminate the "Amtrak must turn a profit" mantra. Then Amtrak could say, "X type of food service costs this much with X staff." Its the price of doing business, its what the passengers want, deal with it or we will lose those customers.

 

[Guest_sldispatcher_*]

Look:

Having been fortunate enough to have flown in Continental's Business First Product....ready to warm meals, etc. can be VERY good when coupled with a few fresh items and appropriate service.....

A few more dollars and you could have some great items...all convection warmed.

Of course, Continental does own their own catering company, Chelsea Foods.

Peace out.