Amtrak spent $428,000 on serving free wine and cheese to passengers on some of its long distance trains last year while the company lost millions on its food and beverage service, its inspector general told lawmakers on Thursday.
Amtrak Inspector General Ted Alves identified complimentary wine and cheese that is served by Amtrak on trains that allow passengers to travel with their automobiles as an area of excessive spending by the company. Alves said Amtrak is also providing wine and champagne on sleeper cars on three of its long-distance routes.
The rail company also spent $260,000 to provide complimentary meals to passengers who were traveling for free on employee benefits, Alves said in a report ordered at the behest of House Oversight subcommittee on Government Operations Chairman John Mica (R-Fla.).
{mosads}The practices occurred while Amtrak was losing $72 million on concession sales in 2012, which Mica has sharply criticized Amtrak for.
“We recognize that it is a significant challenge to provide efficient and cost‐effective food and beverage services across a nationwide passenger rail system with varying route lengths and 24/7 operations,” Alves told Mica’s panel in testimony submitted ahead of hearing Thursday morning.
“To successfully meet that challenge, it is important that Amtrak consider fundamental changes in its management of the food and beverage service,” he continued.
Mica famously went to a Capitol Hill McDonald’s last year to protest the amount of money he said taxpayers were spending to subsidize the cost of hamburgers and drinks on board Amtrak trains.
Alves gave Amtrak credit on Thursday for reducing its losses on concession sales from a total of $609 million between 2006 and 2009, but he said the company could do a lot more to reduce costs.
“The Auto Train offers passengers complimentary wine and cheese, and three long‐distance routes provide complimentary wine and champagne to sleeper car passengers,” Alves said. “Amtrak can increase revenues and thereby decrease losses by charging passengers for these items.”
Amtrak Customer Service Chief Thomas Hall defended the company’s concession program, telling lawmakers the agency had made a lot of changes to cut costs.
“We reduced staffing levels in dining cars and introduced new products which were less labor intensive,” Hall said in written testimony. “We introduced onboard credit card systems and began development on ‘point of sale’ and warehouse inventory management systems.”
Hall said it would take away an advantage Amtrak currently has over airlines and buses to completely do away with food and beverage service on board its trains.
“We live in a very competitive transportation market, and one of our advantages is the ability to provide some amenities — things like the freedom of movement, city-center service, and the ability to buy food when you want it,” he said.
“Taking this away would hurt our competitiveness and reduce our appeal to the customer, particularly the long distance customer,” Hall continued. “Studies have show that the elimination of the food and beverage services on Amtrak trains would cost more in terms of revenue than is spent on the existing service.”