Amtrak reducing/eliminating discounts effective Jan 9?

hs3730 wrote:Sounds like the NARP (erm, RPA?) discount is intact.

I have wondered much the same myself. Haven't heard either way.

https://www.transit.dot.gov/regulations ... estions#41

Under 49 U.S.C. Section 5307(d)(1)(D) of the Federal Transit Act, federally subsidized transit providers may not charge more than half of the peak fare for fixed route transit during off-peak hours for seniors, people with disabilities, and Medicare cardholders.

I thought Amtrak & CR are regulated by the FRA rather than the FTA. Previous poster stated that the Downeaster receives FTA subsidies, so they are on-the-hook. What is "off-peak hours" for Amtrak? Doesn't make sense for LD trains, sold out trains or really any assigned-seating trains or demand-priced trains.

Providing discounts for welfare, old people, young people, students, veterans, military, and associations/clubs are all nice-to-have, but we need to stop thinking of transit as a welfare benefit, but rather valuable infrastructure that folks are glad to pay market price for.

BandA wrote:https://www.transit.dot.gov/regulations ... estions#41

Under 49 U.S.C. Section 5307(d)(1)(D) of the Federal Transit Act, federally subsidized transit providers may not charge more than half of the peak fare for fixed route transit during off-peak hours for seniors, people with disabilities, and Medicare cardholders.

I thought Amtrak & CR are regulated by the FRA rather than the FTA. Previous poster stated that the Downeaster receives FTA subsidies, so they are on-the-hook.

CR being "commuter rail"? For safety purposes you're absolutely right (in heavy rail operations for transit providers). However for funding purposes the FTA does indeed have significant regulatory oversight of commuter rail providers and any Amtrak routes that receive FTA funding.

BandA wrote:What is "off-peak hours" for Amtrak? Doesn't make sense for LD trains, sold out trains or really any assigned-seating trains or demand-priced trains.

I don't know the regulation but I would imagine if they're selling out it wouldn't be considered "off-peak". On daytime regional service this would largely be defined by demand patterns. Some trains into and out of New York might be considered "peak" even though they're in the middle of the day.

BandA wrote:Providing discounts for welfare, old people, young people, students, veterans, military, and associations/clubs are all nice-to-have, but we need to stop thinking of transit as a welfare benefit, but rather valuable infrastructure that folks are glad to pay market price for.

If I were to take you sentence and parse it out I would imagine that by "welfare" initially you meant individuals receiving benefits through the TANF ("cash welfare") or SNAP (food stamp) programs. For Amtrak trains neither of these programs provide any discount. On the other hand if by "welfare" you mean everyone else in that sentence then I think you might want to reconsider your meaning.

Access to mobility and transit are a key means to economic empowerment (employment) and/or well being. Discounts to the above groups are designed to recognize that they are bearing a greater share of the collective societal burden or to assist families in raising children or to assist the elderly with mobility needs (for example ... taking the train to Boston for cancer treatment). I agree that associations and clubs are a totally separate question which should be decided on the basis of economic benefit to Amtrak. All of these other groups, especially the disabled, the elderly, veterans, military and families with children are groups that we all have a significant stake (both personal and fiscal) in their general well-being and economic success.

I’m an AAA employee...I’ll ask our marketing guys about the discount status..

There is probably 4 reasons to provide discounts.
One is to sell more product, you discount our product to make it more competitive with other means of transport, or other discretionary spending for leisure travel.
Another is to entice people to buy the product you have a surplus of, in Amtrak's case, off peak travel. You discount off peak , selling product that would otherwise go to waste.
The Third is for social reasons. All of the groups mentioned above , except AAA. This can be because the company wants to Acknowledge the groups service to Society, or the hardship faced. Or, the company wants to be seen to be doing so, which could also be written off as marketing.
The fourth is marketing, and I think this is where the AAA discount would lie. Amtrak provides the discount, AAA informs its members via handbooks /websites etc, and it is the cost of marketing to a large group of people. If AAA didn't agree to inform their members , I am guessing Amtrak would not provide the discount.
Personally , I think they should increase the discount for all the categories, but only for off peak travel.

David Benton wrote:There is probably 4 reasons to provide discounts.
One is to sell more product, you discount our product to make it more competitive with other means of transport, or other discretionary spending for leisure travel.
Another is to entice people to buy the product you have a surplus of, in Amtrak's case, off peak travel. You discount off peak , selling product that would otherwise go to waste.
The Third is for social reasons. All of the groups mentioned above , except AAA. This can be because the company wants to Acknowledge the groups service to Society, or the hardship faced. Or, the company wants to be seen to be doing so, which could also be written off as marketing.
The fourth is marketing, and I think this is where the AAA discount would lie. Amtrak provides the discount, AAA informs its members via handbooks /websites etc, and it is the cost of marketing to a large group of people. If AAA didn't agree to inform their members , I am guessing Amtrak would not provide the discount.
Personally , I think they should increase the discount for all the categories, but only for off peak travel.

As for reason 1, you shouldn't provide a discount to just certain passengers while other passengers are paying the full fare if you wish to be more competitive with your competition. You should lower the fares for everyone.
As for reason 2, if you have a surplus during off-peaks you should cut the off-peak service. There's two ways to make supply meet demand, and only one of them limits loses.
As for reason 3, privately ran corporations shouldn't be worrying about social justice programs more than they should be concerned about earning a profit. Once the books are balanced, then throwing profits into social projects is perfectly fine...as long as the majority of the stockholders go along with the lower dividends.
As for reason 4, marketing programs should allow across the board lower fares for short durations. It shouldn't be a prolonged, all year, year after year, sale that lasts forever. The purpose of the sale should be to introduce new customers to your business, where you charge full fares later to recoup your loses. A continuous sale that lasts forever means never ever earning a profit.

Amtrak is already using a variable fare process without the discounts, which charges less for trains with available seats and charges more for trains reaching capacity. So off-peak trains already should have lower fares.

But there is a ugly problem that we must be aware of - for all daily NEC regional trains, what's off-peak in New England is not off-peak in the Mid-Atlantic states ---- and vice versa. With Amtrak, off-peak and peak periods aren't daily concepts for this very reason, they're considered seasonally.

Which brings up the social justice problem Amtrak faces as well, the people you want to give discount fares to - travel mostly during the periods that Amtrak considers peak, summer and yule time holidays - the exact time Amtrak should be charging its highest fares.

Everytime Amtrak sells seats at a discount when it has no problem selling seats with the highest fares is a double loss to Amtrak's bottom line.
An explanation follows...... Off-peak fare $50, Peak fare $100. 10% discount off- peak is a $5 loss, 10% discount peak is a $10 loss. Multiply those loses by $15 million (half of Amtrak passengers ride trains during peak months) the loses for discounts add up very quickly.

Amtraks costs are largely fixed , cutting off peak trains is not going to reduce cost significantly.The moment the train leaves the station with an empty seat , that seat fare disappears, you can't store them up , and sell them at peak times. Therefore ,selling a $100 seat for $50 is not losing $50, it is making $ 50. Presuming the fare couldnt be sold at $100 , and can be sold at $ 50 .This whole mantra is well understood by airlines etc , and broadly referred to as bums on seats.
The hard part is figuring out how to sell the maximum number of seats at $100, then $ 80 , then $50 , and so on (Buckets).

David Benton wrote:Amtraks costs are largely fixed , cutting off peak trains is not going to reduce cost significantly.The moment the train leaves the station with an empty seat , that seat fare disappears, you can't store them up , and sell them at peak times. Therefore ,selling a $100 seat for $50 is not losing $50, it is making $ 50. Presuming the fare couldnt be sold at $100 , and can be sold at $ 50 .This whole mantra is well understood by airlines etc , and broadly referred to as bums on seats.
The hard part is figuring out how to sell the maximum number of seats at $100, then $ 80 , then $50 , and so on (Buckets).

That’s what variable seat (bucket) prices do, which Amtrak does already. Now add a 10%-50% discount on top of that destroys that pricing structure.

electricron wrote:Now add a 10%-50% discount on top of that destroys that pricing structure.

Exactly.

I think we are arguing for the sake of it here. I was just pointing out the various ways of discounting , not particularily advocating any given method.

WRT the American Automobile Association discount,

Has anyone called AAA headquarters?

Might it be that whatever service fee Amtrak charges AAA for the discount (many of these discounts are priced into club memberships) was not considered money well spent by AAA, so they dropped it?

Might it be that a price increase in the service fee tipped the discount into the "not good to offer" bucket, and AAA withdrew from the discount?

There's a backstory somewhere.

John_Perkowski wrote:WRT the American Automobile Association discount,

Has anyone called AAA headquarters?

Might it be that whatever service fee Amtrak charges AAA for the discount (many of these discounts are priced into club memberships) was not considered money well spent by AAA, so they dropped it?

Might it be that a price increase in the service fee tipped the discount into the "not good to offer" bucket, and AAA withdrew from the discount?

There's a backstory somewhere.

I'm an AAA employee actually; I haven't had a chance to ask the marketing team that handles discounts, but I suggest someone ask them on twitter....

Historically, the AAA discount was good for the railroad because it invited skeptics aboard.

On the other hand, limiting the minors' rate to one child per parent smells like a targeted correction. The NAACP may have something to say about it.

dumpster.penguin wrote:On the other hand, limiting the minors' rate to one child per parent smells like a targeted correction. The NAACP may have something to say about it.

Its not. They are targeting more revenue because they can. Many state supported services will likely continue to offer these discounts. I respect the concern but I have met with enough senior and mid-level Amtrak officials in addition to riding the trains to feel comfortable saying that Amtrak respects people from all walks of life and is committed to upholding equality in provision of services.

dumpster.penguin wrote:Historically, the AAA discount was good for the railroad because it invited skeptics aboard.

On the other hand, limiting the minors' rate to one child per parent smells like a targeted correction. The NAACP may have something to say about it.

One correction concerning the child fare change. The new limit is one half fare child for each full fare on the reservation, The full fare does not have to be a parent. It does not even have to be an adult. For example, two parents and four children age 12 or under could pay three full fares (both parents and one child) and would be eligible for three half fares for the other three kids..