Entrepreneurs…. Please Disrupt Amtrak

Entrepreneurs…. Please Disrupt Amtrak March 14, 2017 10:38 pm

Founder of Disruptor Daily. Serial Entrepreneur. Passionate about all-things disruption.

Entrepreneurs.... Please Disrupt Amtrak

If we’re on a mission to “Make America Great Again,” can we start with Amtrak, our outdated and inefficient rail system?

Once the pride of our country, our railways are outdated and second-rate compared to the systems in Europe and Japan. We have some of the greatest minds in our country working on disrupting the transportation industry, with apps such as Uber and Lyft getting us around without the shackles of car ownership.

America has the largest rail network in the world — nearly triple the length of Russia’s. Yet ridership on the country’s federal rail program ranks 22nd in terms of passenger kilometers per year. Our rail system is mainly used to move freight, not people. Clearly, there’s a disconnect, making Amtrak ripe for disruption.

While Elon Musk is trying to make the Hyperloop a reality (and California’s proposed high-speed rail project moves at a crawling pace), I’d love to see a greater collective force working to permanently improve our national rail system.

Europeans Have it Better

Rail travel is a useful mode of transportation in European countries. This is mostly due to geography, as the land mass of countries such as England and France are a fraction of the U.S.

However, there’s definitely more to this story. I’ve heard horror stories of U.S. vacations planned by Europeans where San Francisco and Los Angeles are on the itinerary, only to find that it takes most of a day to get between the two cities on train. Unless you want a nice, long road trip, air is pretty much the only way to get around the U.S. Europeans are used to a fast, cost-efficient rail system, relying on platforms such as France’s TGV to get around quickly.

Among the EU28 countries, passenger ridership has grown from 403 billion passenger kilometers in 2011 to 439 billion in 2015. In the U.S., rail passenger miles have largely remained stagnant over the past few years of available data.

Instead of subsidizing roads and highways, EU countries have chosen to subsidize railways. In 2014, those countries subsidized rail transport to the tune of 36 billion Euro, compared to the United States’ 205 million Euro (roughly $217 million) investment in Amtrak.

Amtrak isn’t helping the money by generating revenue, either. In 2016, the company reported its lowest operating loss ever — of $227 million. It has improved over time, but it is still wholly reliant on government subsidies.

It’s obvious that there’s a huge culture shift in how Americans view driving versus taking the train, and it’s one that an enterprising force could take advantage of and highlight the benefits.

Not Made for Passenger Travel

Another key difference that puts Amtrak at a disadvantage is the fact that our railroad system is designed to carry freight, not passengers.

Freight trains have the right-of-way on railroads, leading to unsavory delays for passengers. In December 2016, Amtrak trains arrived on time 78 percent of the time, a 5.2 percent drop from December 2015.

When you look around the world, that number seems pitifully low. According to the Swedish Transport Administration, Japan leads the way with a stunning 99 percent on-time rate, followed by Spain (98 percent) South Korea (94 percent) and France’s TGV (91 percent). The difference between the U.S. and the aforementioned nations (other than the obvious reason of distance) is that rail was built for the passenger in mind, not freight.

People don’t want to ride a slow, inefficient train that might get them to their destination hours late. In many cases, flying is half the cost and twice as fast.

I would love to see a company build a railway system not reliant on freight lines. Maybe they could even use big data to analyze the freight and Amtrak routes and run trains on existing railways to fill in gaps.

Needed for Environmental Health

As global warming becomes more and more of an issue, travelers could start looking for a greener way to get around — even if that means paying a little extra or having a longer trip.

Numerous studies have shown that among the three dominant modes of transportation (plane, train, automobile), traveling by train leaves the smallest carbon footprint. For instance, a round trip from London to Paris could be 91 percent more carbon-efficient if done on a train, instead of by air.

If you think this doesn’t matter to consumers, you are dead wrong. Today’s consumer has the power of research right in their pocket, and price point isn’t the only criteria they use.

In recent years, the term conscious consumerism has taken hold. Many consumers want to know the environmental impact of the things they buy before they make the purchase. Brands with a charitable bend are often top-of-mind to these consumers.

According to Nielsen, 66 percent of global consumers in a study said they’d be willing to pay more for sustainable goods.

Imagine if those consumers had access to an efficient, environmentally-friendly way to travel? This should be your next goal, disruptors of the world.

Founder of Disruptor Daily. Serial Entrepreneur. Passionate about all-things disruption.