On March 27, we posted about the numbers surrounding the proposed $600 million investment to bring Amtrak rail service along a corridor between Minneapolis and Duluth.
Many of you shared your stories of rail and bus travel, and many expressed a deep appreciation for the comfort and conveniences of travel by rail. To learn more, I created a short, anonymous reader survey that asked where you would like to travel on the proposed route and how much you as a rider would be willing to pay for it.
Before we dive into the data, it is important to note that this was a survey of readers of Streets.MN, not a random sample of the traveling public at large. It is highly likely that our readers are more willing to travel by rail and willing to pay more to do so. Nonetheless, we received over 300 responses, which gave a good sample size of this influencing community. Check out all the data.
Most readers said they would be leaving from Minneapolis. Among all 301 responses in our sample, 68.44% said they would depart from Minneapolis, 20.27% from Duluth, and 7.64% from Coon Rapids. Nearly all the trips taken were to either Minneapolis or Duluth, with 94.20% of Minneapolis trips going to Duluth and 98.40% of Duluth trips going to Minneapolis. Only 12 responses, or 3.99%, included trips to a station other than Minneapolis or Duluth. One thing to note here is that riders would be making return trips to their starting station, but it is striking how the vast majority of the traffic is between only two stations.
Diving into the economics
The key question of our survey gauged what our readers’ “willingness to pay” for their tickets was. I broke down our original 301 responses by station-to-station trip, and created charts for the three most popular trips, Minneapolis to Duluth, Duluth to Minneapolis, and Coon Rapids to Duluth.
The charts below for each trip are simple demand curves, which you may recall from high school or college economics. On the X-axis is the number of people who are willing to pay for a ticket, the quantity (Q). On the Y-axis is the price of a ticket for that specific trip, the price (P). We assume that if the ticket price is less than or equal to what a reader responded as their upper limit, they are then willing to buy that fare.
Here are the demand curves for each of the three trips that were most popular in our survey.
How an Amtrak monopoly would price tickets
Of course, for every demand curve, there should be a corresponding supply curve or line. In our case, Amtrak has a monopoly on passenger rail travel, although it competes with commercial air and personal vehicles.
For the Minneapolis-to-Duluth route, it would be fair to assume that once all the capital improvements are made and the train cars are running, the marginal cost, that is the cost to add one more passenger, is very low and close to zero dollars. In this environment, it would make sense for Amtrak to price their service to maximize total revenue, ticket price multiplied by passengers. As it happens, knowing the exact shape of the demand curve would allow a monopoly like Amtrak to price its tickets to best maximize total revenue.
Going back to our demand curves, you may notice that those two variables that determine total revenue — price and quantity — are both there. Our next step was to create a new set of charts that multiply those two along the demand curve and see where Amtrak could maximize total revenue, essentially the biggest rectangle under the blue line of the demand curve.
For all three trips, the total revenue peaks at a ticket price of $30. It would likely be in Amtrak’s best interest, therefore, to price all three trips at $30 one-way, even though the Coon Rapids trips are slightly shorter. What matters for a monopoly is willingness to pay.
How our readers travel now
At the end of the survey, our last question asked how readers traveled for their last trip of more than 100 miles. Nearly two-thirds, 65.12%, of readers made their last major trip by personal vehicle and nearly a quarter, 24.92%, made it by commercial or private flight. Of the 301 readers who participated in a survey on rail travel, it was surprising that only 12, or 3.99%, made their last major trip on Amtrak.
The bottom line
The bottom line of this survey is mixed. There is clearly great excitement for a rail link to be reestablished between Minneapolis and Duluth. If our readers are a reflection of the rail traveling public, then Amtrak would be wise to price its tickets at about $30. But right now the car is still king, and finding last-mile transportation options for riders arriving in both cities could be a major obstacle to station-to-station rail travel. It’s no accident that airports and car rental lots are so well connected at hubs across the country.
What was the last trip you took on Amtrak? (Mine was to skiing in Montana!) What do you think we can do to reduce personal vehicle use or the carbon footprint? Share your stories and your thoughts in the comments!
I took Amtrak from Seattle to Vancouver, BC. It is a beautiful ride though slow once you get into BC as there is not a straight route into Vancouver. But much more comfortable ride and no significant lines. Far less stressful travel and plenty of space to open my laptop and get some serious work done when I wasn’t looking out the window.
Would it make sense for regional and intercity trains to continue past Minneapolis to Saint Paul Union Depot?
The last trip–only one, so far, that I took by Amtrak was from near Fargo, ND to that small station near Madison, WI, where my friend picked me up.
Amtrak was a fun way for my son and I to travel and we both really enjoyed it, and Amtrak is a boat anchor to US taxpayers and should be privatized and overhauled to run efficiently.
Amtrak is heavily subsidized by tax dollars, and still operates at a loss. The service is notoriously late from scheduled arrive/ depart times.
One wsy to reduce carbon footprint is to privatize Amtrak and make it compete on an even field for it’s customers. And if the run is not profitable for the line, they would then be motivated to either alter their pricing and discontinue that run. Running a train at a loss, for the sake of running the country’s largest railroad hobby, is an enormous carbon footprint.
At $30 one way or $50 round trip I would gladly take the train! I would even be more likely to actually go to the Twin Cities for trip as the main issue now is that I simply hate driving in the Twin Cities, it is bad enough getting through Canal Park in the summer with all of the Twin Cities tourists.
A bullet train could open up growth for Duluth and possibly make the twin cities more attractive to out of staters. I wouldnt likely take a train to Duluth that wouldnt get me there as quickly as driving.
Bullet train wouldn’t cost $50.00 round trip. Just like Amtrak Acela charges a significant premium for its “high speed” rail service in the Northeast, bullet train would have to charge anywhere from $150.00 to $300.00 or more round trip. The only people paying those prices, just like the Acela, are businessmen. There wouldn’t be anywhere near enough “business demand” to run bullet train service from Minneapolis to Duluth. No chance bullet train or high speed rail would be profitable. Not a chance. It would have to be 90% subsidized thru taxpayers. No thank you.
There is no type of transportation that doesn’t require capital subsidies.
I would counter that airports are highly profitable, with JFK making over $450 million in operating income per year. With bonding against this income, capital improvements can be self-funded.
And TSA (and other security) and air traffic control and the FAA and other things that I’m not thinking of off the top of my head (yeah, some of those things are effectively covered by user fees)?
Airports are interesting, though, in that we’ve created a system that traps people in them at length and thus creates opportunities to sell them things at supra-competitive prices.
The last time I was on Amtrak was when I was 5. My parents got tired of always driving to Minot to visit our relatives and would occasionally fly or take the train. In the pre-deregulation era flying to Minot wasn’t astronomically expensive like it was now. I’m not sure about the economics of the train.
My sister and I have discussed the idea of taking the Empire Builder to Seattle, as a tourist thing rather than transportation, but normally I can’t think of a scenario where taking the train makes sense. The cutoff point between driving and flying for me is 400 miles, about the distance to Chicago. The trade-off being the expense and aggravation of flying plus renting a car there compared to the expensive and aggravation of driving all the way there but having your own car. Trains would combine the being cooped up with strangers and having to rent a car with the slowness of car travel.
Trains are great fun to ride on, even slow Amtrak. This is especially true if you enjoy looking out the window. You can walk around and stretch your legs, eat meals, play games, nap…
Listen. When I can fly from Minneapolis to New Jersey in just over 2.5 hours for $300.00 round-trip vs Amtrak taking over 24 hours EACH Way, and costs me over $1000.00, yea, no Fing way. I’d rather drive than be stuck in that nasty, “silver sausage” for over two day’s. Amtrak works in the Northeast. All other places are a complete LOSER.
Outdated rail technology works about as well as any other outdated technology. We could have rail that is vastly faster than driving. We don’t because we love subsidizing cars and hate subsidizing anything more efficient than cars.
Yeah, air travel is also a constraint for longer trips, but there are a ton of routes out of Chicago that seem like they’d be viable (Minneapolis, Detroit, Cleveland, Indianapolis, St Louis, Milwaukee, Toledo, Nashville, etc) or on the west coast (San Diego, LA, San Fransisco). Heck, even the northeast corridor could take a ton more trips with real high speed rail.
I’ve taken the train to New York City and Boston many times and enjoyed it.
We took Amtrak on a circle tour from St Paul to Chicago to Washington DC to Jacksonville to New Orleans to Chicago and back to St Paul back around 1996.
We would get off for any where from a night to a week at Disneyworld to do touristy things at the major cities.
Pack snacks and eat wherever you stop- food was sketchy but trip of a lifetime.
IT WOULD BE NICE TO GO FROM CHICAGO TO FLORIDA. WITHOUT FIRST GOING TO NYC
or from Minneapolis to Des Moines without going through Chicago!
There is no indication that this rail line will be any different from the majority of other rail lines across the country, which is a waste of taxpayer money. These almost never pay for themselves. There is a passenger line that passes near my house daily and nobody is on it. Please find a better use for more than half of a billion dollars.
freeways also do not pay for themselves
Ross pointed out that an EMPTY passenger train passes by his home, DAILY.
The “empty mile” cost of a freeway is very small, and that time window is usally very small, also. It does cost money whenever an Amtrak train is turned on and run, and it is a total loss when, as Ross states, there are no passengers.
Ross didn’t say where he lives, but all two of the passenger rail lines that run in Minnesota, (Empire Builder & Northstar) have decent ridership, so his claim of Empty Trains OMG! is off-topic at best, a bad-faith argument at worst.
This whole website is full of bad-faith arguments, unless good vs bad is in the eye of the beholder?
If you say so, but that’s not my experience reading 99% of the comments.