Fixing Amtrak with Private Operators

Amtrak’s national network is essential, but ineffective. Strategic privatization can enhance operations while preserving access for all communities.

Earlier this month, NJ Transit traffic along the Northeast Corridor came to a griding halt due to an Operating Engineers strike. Amtrak gained full control of its busiest route along with a captive ridership looking for alternatives. With no competing rail traffic, it could have expanded service, stabilized fares, and demonstrated efficiency. Instead of rising to the occasion it confirmed doubts about its ability to adapt and deliver under pressure.

During the four-day strike Amtrak failed to increase service and allowed prices to spike astronomically. Amtrak could have used this moment to highlight high-speed rail potential, beating records for travel time between Washington, D.C., and New York City or demonstrating improved operational efficiency. Instead, Amtrak meekly warned of potential delays despite having a clear right of way. At a time when all eyes are on Amtrak and national rail Amtrak completely whiffed.

It is no wonder then there is growing support to privatize Amtrak. Supporters argue that a private operator would streamline operations, increase efficiency and be nimble enough to take advantage of great opportunities. Private operators would boost efficiency but also cut unprofitable routes that would further abandon already underserved communities. At its core, Amtrak functions as a public service, operating under a federal charter to ensure nationwide accessibility. While this structure is essential, Amtrak’s current performance shows that it is failing to meet expectations.

(For a more in-depth analysis of why fully privatizing Amtrak is misguided I suggest reading Andrew Millers in depth piece here: https://substack.com/home/post/p-160665471?utm_campaign=post&utm_medium=web)

Instead of full privatization, a more effective solution would be a hybrid approach where private operators manage select routes while Amtrak maintains oversight, ensuring efficiency gains without sacrificing accessibility. Amtrak, burdened with managing an extensive national network, does not fully optimize individual routes. A private operator, while still required to maintain existing service levels, would have the incentive to enhance and expand operations. This would leverage market incentives to improve efficiency and increase service while maintaining accessibility for all communities. A properly designed system could ensure that private operators expand service rather than eliminate it—introducing competition, innovation, and reliability while preventing the hollowing out of essential transit corridors through fare regulation and other safeguards.

International examples set a precedent and show the advantages of introducing private operators to specific rail corridors while maintaining a publicly governed rail network. Germany’s Deutsche Bahn incorporates private operators on certain routes, fostering competition and service improvements while keeping core rail infrastructure under public oversight. Similarly, Japan has successfully privatized its regional rail operations, allowing them to operate profitably while ensuring public access to transit services. These models illustrate how a structured approach to private rail operations can drive efficiency and improve service reliability without compromising accessibility.

The case for private operations rests on the need for a more agile and responsive system. A private operator would have been nimble enough to capitalize on the recent strike by immediately expanding service and maximizing revenue to the benefit of the ridership and shareholders alike. This kind of responsiveness has already been demonstrated by private transit operators such as Boxcar and NY Waterway, which quickly rolled out increased service and competitive pricing during disruptions. Meanwhile, Amtrak remained stagnant and ineffective.

If properly structured, private rail operations could introduce the same level of adaptability to key routes, ensuring better service while preserving Amtrak’s essential role as a nationwide public transit provider.