We often hear politicians, of both parties, talk about trying to run the government “like a business.” Of course, the government isn’t a business, and it inevitably doesn’t run like a business — even when it is performing a business-like function.
The latest example of this reality is the news that Amtrak is selling food and beverages to its passengers at a loss. In the last decade, Amtrak’s food and beverage cars have lost $833 million. $833 million! How did that happen? Because Amtrak is selling food and beverage items for less than it costs to supply them. According to the linked article, every cheeseburger costs Amtrak $16.15, yet Amtrak charges its customers only $9.50. Every can of soda costs Amtrak $3.40, and Amtrak charges its passengers only $2. The fact that each can of soda costs Amtrak $3.40 tells you something about Amtrak’s uncompetitive cost structure, given that any American can buy an individual can of soda — to say nothing of the per-can cost of a twelve-pack — for much less than that.
Of course, no business could remain in operation if it racked up $833 million in losses over ten years and regularly sold goods for much less than it costs to provide them. The fact that Amtrak has done so for a decade just confirms that bureaucrats don’t think or behave like businessmen and aren’t subject to the same competitive pressures that cause companies like Wal-Mart to constantly search for ways to bring goods to market for the lowest possible price.
People of different views may disagree about whether we should subsidize Amtrak fares in order to support mass transit. Does anyone, however, really think it is appropriate that taxpayers also subsidize the cheeseburgers and sodas that the Amtrak passengers consume on their already subsidized journeys?