Why Trains are so Expensive


This is a Wendover Productions video made
possible by Videoblocks. Get an exclusive 7 day free trial of Videoblocks
with up to 140 free stock footage clips for your videos by using the link videoblocks.com/future. Before I start, I want to quickly mention
that I started a podcast with Brian from Real Engineering called “Showmakers.” In the very first episode which is out now
we chat with none other than Hank Green. I’d really appreciate if you give it a try
and the link is down in the description. Trains are expensive. So expensive, in fact, that on three of the
most travelled routes in three countries—New York to Washington in the US, Edinburgh to
London in the UK, and Paris to Lyon in France—they’re pretty much the same price as the plane. These routes start at $49, £30, and €30
respectively on the train and $52, £13, and €53 on the plane. On a longer route like New York to Chicago,
the difference is even more pronounced: $59 for the plane, $108 for the train. And that’s keeping in mind that trains are
subsidized or government run in almost every country while airlines are highly profitable
commercial enterprises. The planes flying between DC and New York
are $49 million dollar machines, while the trains traveling the route cost no more than
$10 million total. The plane has to burn 1.7 gallons of fuel
per mile flown (3.9 liters per km) while the train relies on cheap, clean electric power. All this therefore begs the question, why
are trains so expensive? Now, I mentioned that fares between DC and
New York start at $49, but that’s far from the average price—$73. Let’s look at the expenses that go into
that fare. The single largest expense for Amtrak is staffing. Trains require a lot of people to operate. 85,000 passengers journey on Amtrak daily,
but for that Amtrak employs 20,000 people meaning that, daily, Amtrak requires one employee
for every four passengers. On top of that, the majority of those working
for Amtrak are highly specialized, unionized workers who demand high salaries. Amtrak’s financial reports tell us that
they spend $105,000 per employee, but that’s not to say that everyone at Amtrak is making
six figures. Taxes and benefits typically cost an employer
30-40% of a salary so the actual average salary for an Amtrak employee is around $75,000. These salary costs are so high that they account
for over a third of the ticket price between DC and New York—$25.82 total. The cost of employees is so high for train
operators largely because trains are so slow. For a flight from DC to New York, an airline
would only have to pay employees for an hour of work while Amtrak has to pay their employees
for three and a half hours of work. The difference is even more striking on long-haul
routes—Chicago to Los Angeles for example. An airline would have to pay for four hours
of work, while Amtrak pays for 44 hours of work. In addition, trains have physical infrastructure
to maintain along the journey—the rails. Airlines also have infrastructure to pay for
on each end—the airports—but between those they just use the sky, which is free. Amtrak only owns 730 miles of the 21,000 miles
of track they use, but they still indirectly pay for the employees who maintain those 20,000
miles of rented track through the fees charged by the track owners for their use. The next largest cost for train operators
is that of the trains themselves. Trains aren’t that expensive compared to
airplanes, but they still cost millions of dollars. The locomotive pulling the train from DC to
New York costs $6.5 million dollars and then each one of the passenger cars costs an additional
$400,000. With a seven car train, that works out to
$9.4 million dollars which accounts for $9.67 on this particular ticket. The other part of infrastructure—rails—costs
Amtrak an additional $3.66 on this ticket. Railroad tracks are extraordinarily expensive
to build—typically more than $1 million per mile—but on routes like DC to New York,
they’re just used so much that the per train or per ticket cost is negligible. Amtrak is a business, so it also needs to
pay to run the business. $2.15 of this ticket goes to administrative
costs, and then another $1.31 to advertising. Moving on, trains are extremely safe compared
to cars, but you’re still more than 3 times as likely to be killed on or by a train than
a plane. Trains do occasionally crash, and they also
crash into people. When this happens, Amtrak often has to pay
a settlement to the victims, and the fees associated with that account for $0.79 of
the DC to New York ticket. That does mean that when traveling between
DC and New York, in essence, you’re paying $0.79 in order for Amtrak to kill or injure
people. Those were all the major costs to run a train,
but there’s still another $5.91 on that ticket that just represents other minor costs. So the total expense for Amtrak to run that
train is $50.14. The remaining $22.86 is pure profit. You see, the train from DC to New York, the
Northeast Regional, is one of the few Amtrak routes to make a profit. The demand, speed, and frequency of the train
helps it succeed financially where other routes failed. Per passenger per mile, Amtrak makes eight
cents of profit on the northeast regional, the low speed train, and 29 cents per passenger
mile on the Acela Express, the high-speed train. These profitable routes help pay for Amtrak’s
unprofitable routes… and there are a lot of them. Some routes like the Sunset Limited between
New Orleans and Los Angeles lose as many as 21.7 cents per passenger per mile, and when
passengers can travel 2,000 miles on that route, that’s a lot of loss. As I mentioned, that $49 fare is not the average
ticket price to travel between DC and New York. The $49 fare is the price at which Amtrak
starts selling tickets, but as the date of travel nears, the price can increase to hundreds
of dollars. That might seem like price gouging, but its
actually a way to make sure everyone can afford a ticket. That’s not to say Amtrak and other train
companies are these altruistic organizations trying to bring travel to the masses—it
just makes more money. Especially with trains where it costs the
operator roughly the same to transport 5 passengers as it does to transport 500, the operator
always wants to have as many seats as possible filled, even if that means selling cheap tickets. In a perfect world for the operator, they
could ask every potential passenger what the maximum amount they’d be willing to pay
for a journey is. If they adapt the ticket price to every passengers
maximum price then they can fill each seat with passengers paying the highest possible
amount. However, in practice, nobody would ever answer
the question truthfully so it would never work. Ticketing systems, however, try to ask this
question subliminally. Going back to that route from Edinburgh to
London, the operator, Virgin Trains East Coast, sells three types of tickets—advance, off-peak,
and anytime. The advance tickets range anywhere from 30
pounds to 140 pounds, the off-peak fares cost 137 pounds, and the anytime fares cost 148.50
pounds. For the advance fares, there are a certain
unknown number of tickets at different price levels on sale and once they’re gone, they’re
gone. For example, there might be 15 tickets at
30 pounds and once they’re sold, the price would increase to 35 pounds, then 40, 45,
and so on a so forth. That encourages those who can buy early to
buy early. Normally that means tourists. Tourists tend to plan far in advance and are
more budget conscious since they’re paying their own costs. They’re also more likely to travel down
to London on the often cheaper plane since they’re less attracted by the convenience
of the train. These advance fares are only valid for the
exact route, day, and time bought which is fine for leisure travelers, but business travelers
typically want more flexibility. Buying advance fares often doesn’t work
for business travelers since their plans are only made a few weeks or days in advance and,
since they don’t personally pay for their tickets, its no problem for them to pay for
the convenience of taking the train on a flexible ticket. That’s why they often pay £148.50 for an
anytime ticket. With these, you can just hop on a train whenever—it
doesn’t matter if its in 10 minute or 10 days. You just step on the train and take a seat. The middle ground between those two is the
off-peak single which lets you take any train that arrives in London after 11:17 am or is
on the weekend. These fares are still geared towards business
travelers, but by restricting against the early morning trains they give a discount
to those who can avoid the busiest morning trains.. For each of these fares there are equivalents
in first class—the advance first fares range between 40 and 200 pounds, the off-peak fares
are 185.50 pounds, and the anytime fares are 236.50 pounds. On top of that, young, disabled, and elderly
people get up to 1/3 off their fares with a rail-card. This all means that there are essentially
12 different types of tickets for sale and that one person heading to London might be
paying 20 pounds while the person sitting right next to them is paying 200 but what
they’re really paying for is convenience. Now, back in the US, if Amtrak only operated
profitable lines, their route map would look like this, but the routes that don’t make
money are the ones that really matter. Amtrak serves over 500 destinations in 46
states—many of which are small towns with no other means of public transportation. While trains are normally the more expensive
means of transport, they are less expensive than planes to service small communities. The small airports in the rural parts of America
are extraordinarily expensive to operate. Even if there are just two or three flights
a day, they still need a runway, terminal, security, and air traffic control while a
rural train station needs barely any infrastructure or maintenance. In fact, it’s cheaper to fly from Chicago
to London ($741) than it is to fly from Havre, Montana to Chicago ($811 May 17-22) whereas
Amtrak brings passengers from Havre to Chicago for only a few hundred dollars—much more
in budget for the average resident of Havre who makes only $22,000 per year. Of course this is a political issue, but a
part of why trains are so expensive is to allow train operators to fulfill obligations
to serve small communities who need solid transport links. Research has shown that ease of access to
transport has a stronger influence on whether someone will earn more than their parents
did than the level of crime in their area or whether they grew up in a two-parent household
and so keeping trains running through rural America is incredibly important. Next time you take the train from DC to New
York, just keep in mind that that $22.86 of profit goes to making sure that someone from
Havre can get to Chicago for less than you can fly to Europe. So you see this number? That’s how much these last few seconds would
cost if I were buying footage from a traditional stock footage provider. Luckily, I get my footage from Videoblocks
where with their membership you can use as many of the 115,000 clips in their unlimited
library as you want. Since I started Wendover Productions, I’ve
used 686 clips from videoblocks—almost every piece of footage you see in my videos is from
them—and that means that I’ve saved $54,194 with my Videoblocks subscription. Without Videoblocks, there’s no way that
my videos would look as professional—I simply would not be able to afford it—and whether
you already have a youtube channel or plan to start one, Videoblocks will do amazing
things for your production value. I can honestly say that it’s one of the
best purchases I’ve ever made and I’ve used Videoblocks since day one. You can try out Videoblocks exclusively for
seven days with the link videoblocks.com/future—that is not a publicly available trial—so please
go try them out. Not only is that a great way to help Wendover
Productions make more videos, you’ll also get a chance to use what is truly an amazing
service. You can also support Wendover Productions
on Patreon here, follow me on Twitter @WendoverPro, watch my last video here, check out my fan-moderated
subreddit here, and lastly subscribe to this channel by clicking here. Thanks again for watching and I’ll see you
in two weeks for another Wendover Productions video.

Maurice Vega

100 Responses

  1. Here's a good idea do you know how we can bring steam engines back electric steam engines instead of using coal they use electricity and it will only create evaporated water instead of that black smoke

  2. I wanted to book a roomette from Chicago to Glacier on the Empire Builder for 5 days which included two overnight stays on the train. The price for one person turned out to be $2700. That's $540 per night. As much as I'd like to experience this once in my life, I just can't justify paying that much.

  3. Come to India . they are cheapest mode of transport. They are so cheap that you can even travel for free sometimes if it's too crowded

  4. In india the trains are just so cheap we love them. I can travel, in non air conditioned class with reservation, 650 kilometres for like 500 rupees which is around 7 – 8 dollars. First class costs around 7000 rupees for a person which is around 100 dollars. But the luxury in first class is quite high.

  5. Sorry Wendover, you could not explain why price of train ticket is high. You are just telling the tariff on different route.
    Cost of operating train is high just because companies are not spending money smartly.
    Trains are also operated in countries in Japan, Singapore and South Korea. They are making good money that's because they are spending money more wisely.

  6. and how many trains ended up in the world trade center or the pentagon? Trains ftw (although for under 1000 km unless they are extra fast)

  7. I still don't get it … why employee/passanger ratio should be 1:4 when 1 driver can carry >1000 passangers ?

  8. Mean while in India travelling from Dibrugarh to Kanyakumari (2700 miles)
    journey time of 83 hours (including 56 stopping points)
    Costs 1100 rupees {non a/c sleeper ($16)} to 4000 rupees first {class sleeper ($60)}

  9. What if someone takes a third of the military butget and builds a train net across the US? 🙂 I'm just kidding, you "need" more guns. 😉

  10. £30 from London to Edinburgh? Yeah of course!!! Impossible!!! Plus taking the UK as a reference is completely wrong! The UK is by far the most expensive country in Europe, and I mean it! All the other countries are much much cheaper (and by the way, very average service)! I still don't understand why people don't complain! The train in the UK is not a popular means of transportation.

  11. Did you know diesel fuel is WAY safer than water? Thousands of people drown in water every year. Almost no one ever drowns in diesel.

  12. Don't they have to pay freight railroads to use the tracks? That is VRE's biggest expense paying the host railroads. VRE is a commuter rail taking commuters from Northern VA to DC . At :3:41 is a VRE train

  13. Compare with India.. 7.5 million passengers per day transported on the Mumbai suburban railway alone. And ticket costs….. hahaha. You would pity the govt and pay more.

  14. The UK can be expensive and people know that the railway is privatised so that means one thing, profit. There are decent tickets out there to be found, £4.50 Birmingham to London and that was with a railcard, the card pays for itself the more you use it. Try going to London in your car for £4.50 return, you have petrol, congestion charge, parking etc. the other argument is HS2 in the UK needed, big debate here at the minute and it’s going ahead but there’s always someone saying it should be stopped

  15. How come there are so many employees? They said 1 employee for 4 passengers. How come trains are expensive but subways and the metro are not?

  16. Oh yes, they leave out the fact with out the GOVERNMENT TRAFFIC CONTROL SYSTEMS AND AIRPORTS. There would be NO air service. Nor the government roads to get to the airport. Nor that train tickets on private companies years ago were taxed to build airports and highways! In the US

  17. I see he added the cost of motor vehicle accidents. On those level crossing some from 1840! Those are highway accidents. If not for the vehicle running the gates it wouldn't happen. If we had a modern system with fly overs it wouldn't happen either.

  18. THERE IS NO PROFIT ON THE NORTHEAST CORRIDOR. IT'S ALLOCATED EXPENSES , COOKED BOOKS AND FRAUD. All the railroads there all of them went bankrupt on the NEC! Expenses like snow removal are allocated to Florida stations! The Pennsylvania and New Haven RR went bankrupt even on freight service there!

  19. Nice he left out the Sunset Limted only runs 3 days a week with 7 days of demand and expenses and allocated NEC costs. Only 3 days of ridership and revenue! The answer of course is to have daily service and add a section train like the Golden State!

  20. I like how the train to Indianapolis was shown as profitable! By the way as of June 30th it's gone! The state was paying for it. The Hoosier State is gone! Now the route is only 3 days of income and ridership with the Cardinal and 7 days of demand and expenses! Like the Sunset Limited. The Hoosier State left too early had downtown paid parking in a some what bad area. Zipped by the airport no stop. Went by a town called Brownsburg that would have been a perfect park and ride with I-74. And has a new private 80 million dollar development of stores and apartments. No stop of course.

  21. Trains lack competition. Leading to poor service and expensive overhead costs. Also, trains uses 4 miles of track per train. A highway road can have 50 coaches per mile.

  22. Also, the staff earn an average $75,000 per year ! That is a big part of the problem. Again down to no competition between train companies.

  23. Trains are expensive everywhere. Provided you have sufficient passengers to fill numerous and frequent services for short to medium distances (by US standards) the cost will be less per person and they become viable. If you don't, flying will be a lot cheaper except on shorter routes. That's why places like Europe, Japan and China have extensive passenger rail services and places like the USA and Australia do not. 
    In the USA and Australia the long distance rail routes are primarily for freight and they are usually quite profitable at that. Their equivalent passenger services are not. Every so often dreamers in Australia want to build a high speed rail link between Sydney and Melbourne (the sixth busiest air route in the world last time I checked) and point to other countries with nothing like its distances and population distribution. But they're about 1000km or 600 miles apart, with few other major population centres in between; ideal for flying but not (even) for high speed rail (especially taking into account the difficult, aka expensive to build in, rail country that mostly encircles Sydney). If it were built and operated commercially, passenger fares would be around six to ten times higher than standard (not discounted) air fares, even if it captured half the passenger traffic at that high price.
    Australia does have long distance passenger trains, but they are either tourist trains (like GSR's Indian Pacific and Ghan) where people pay the price for a once in a lifetime experience, or (like NSW TrainLink's XPT and XPL services, and Queensland's Tilt Trains) they are highly subsidised for the benefit of pensioners and the politics of keeping small country cities and towns reasonably connected (much like many Amtrak routes).

  24. Airlines are highly profitable? That didn't use to be the case. Was a very competitive unprofitable industry after de-regulation.

  25. 3.30 the math doesn't quite make sense for me. As far as I know a train can be used more than once. So saying a train costs 9 dollars per ticket is just BS

  26. There are these things called busses that can serve rural areas profitably. Might be better than bloated government bureaucracies

  27. Because it's the government who keeps on putting train fares up. And passengers who use trains do pay more. Which o think it's a cheek. And it's just pure misery.

  28. Good point that faster can be a savings. It's not just labor, but use of capital. If a $100 million plane can make 8 to 10 flights in the time that a $10 million train makes 1, that makes the cost of capital for the vehicle more similar per trip.

    It's odd that tickets on the slow train often cost less than on the fast train (I saw that markedly in Spain), given that using so many more hours of labor, and tying up capital for so much longer, costs. A motivation for France's TGV was supposedly greater throughput on some busy stretches of rail. Slow trains are such resource hogs.

    Using 40 person buses may make more sense for serving smaller cities than 1000 person trains.

  29. If Amtrak would operate as efficient as the trains in Europe people would use them more. Let's face it, Amtrak is pricey, it runs late often and several could use an overhaul. Just my opinion of course.

  30. Well here's a simple awnser the reason planes are cheaper is because it saves more time and fuel then trains do and trains Arent always so expensive it depends on the leanght of the route you take idk if this is true in america i but it is how in Europe

  31. Passenger trains are so 19th/early 20th century. Ike's interstate highway plan coupled with the family car, motels, and eventually competition in what was once a heavily regulated airline industry killed the passenger train. The final 7 class A railroads in this nation will not bring passenger trains back because freight is profitable and passenger trains are not. One of the reasons why AMtrak still operates across the nation is because congressmen in those districts with small burgs you talk about force it down the taxpayers throat.

    Folks like to talk about Red China, but with over one billion plus people, cheap transportation is a must, thus their passenger rail operations. Same goes for India, which also has over one billion people. As for Europa, it's small and easier to get around by train if you're not in a hurry. In America, we're always in a hurry. If not the car, then it's flying.

  32. intercity rail is a bad example for the US, rapid transit and lightrail, and/or subway systems are better and more efficient, bart for example in the sf bay area (which alot of people hate because of some of their practices and delays) get you to three major cities (by the end of this year it will be 3) and countless small towns and suburbs, all quicker or competitively on time with driving

  33. @wendover You forgot sky is not free. Take in account the CO2-aqu. pollution and costs for the economy and world pollution. If you add this to plane ticket, it would be above train ticket. BTW 1 on 4 ration staff/passanger…wtf. There somebody should get a look in Germany about orga of railway systems like DB.

  34. This strikes me as a hit piece against rail travel and unionized workers. Trains in the USA are expensive because we don't have enough rail to make them popular, and they're not reliable because US passenger trains have to share the track with freight, which gets precedence. I've many times seen the Pacific coast Amtrak sitting on a siding, waiting for freight trains to come by. Because of this, you can never rely on schedules unlike trains in other countries, that have dedicated rail for passenger lines. Trains are the most efficient, least polluting of transit, unlike jet travel, that's the worst. The damage from airplanes is externalized by the companies and paid for by citizens, in the form of wars for oil and environmental damage.

  35. there's no WAY you can get a train from edinburgh to London for £30, that just isn't going to happen. A standard fare is £160.

  36. trains are indeed relatively expensive in many parts of the world, but the video does little to explain that, offering wierd sentences such as: when travelling on new york – DC track, you're paying 79 cents for amtrack to kill or injure people. well that's quite a way of putting it… might suggest the author has something against trains. as if other means of transformation don't have accidents.

  37. Someone tell me how to get a train to edinburgh for £30 or even better a plane for £13 like is there a voucher code….

Leave a Reply

Your email address will not be published. Required fields are marked *

Post comment