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Are you one of the 72 million Americans who take trains every year? If so, are you aware that Amtrak is a government corporation? Did you know that as a result, they are legally required to operate in the red and can only receive loans from the government? For many people, these facts come as a surprise. After all, we often think of government-owned corporations as being commonplace examples like schools or libraries. The United States government owns up to 81% of Amtrak's shares and controls the corporation's board of directors. 70% of the company's board of directors are appointed by the President with the advice and consent of the United States Senate. But it’s easy to see why most people aren’t aware that Amtrak operates this way. After all, it’s not exactly common knowledge what makes some corporations “public” and others “private.” Fortunately, if you also love trains, this article will help lift the veil on how locomotives like Amtrak work and explain why it matters for you. What Exactly is a Government Corporation? To start, let’s clear up what a government corporation is. There are two types of corporations that are legally operated by the government: Government Owned, Contractor Operated (GOCO) and Government Operated (GOV). Amtrak is GOV. GOCO arrangements are a lot more common than you might think. For example, the Federal Aviation Administration (FAA) is a GOCO. GOCO arrangements involve a contractor who is paid to provide a service for the government agency. They do this by hiring employees, purchasing equipment and supplies, and managing the day-to-day operations of the service. The contractor is responsible for all of the risks and rewards associated with the business. The government agency, however, is responsible for the contractor’s financial obligations. Amtrak is a GOV. This means that the government owns all of the railroad’s assets and has ultimate responsibility for all of its operations. The company’s sole purpose is to provide safe, reliable and convenient passenger rail service to the American public. Amtrak doesn’t get paid by customers or by taxpayers; it gets paid by its members (which are Amtrak employees). Antony Guppy What Does Being a Government Corporation Mean for You? Being a government corporation means one thing: The U.S. Government has ultimate responsibility for your safety and security. And that means that if you ride Amtrak trains, you have the same level of protection and care as you would get from any other mode of travel in this country. Amtrak trains have their own police force . The Federal Railroad Administration (FRA) has its own law enforcement division called the Office of Inspector General (OIG). OIG operates independently from any other law enforcement agency within the U.S., including state police, local police and federal agencies like Immigration Customs Enforcement (ICE) or Department of Homeland Security (DHS). They do this because they are independent from any other government agency within America and they can enforce federal laws without being subject to political pressure or influence from other branches of government. As a result, they can do their jobs without self-dealing or favoritism on behalf Why Does it Matter That Amtrak is a Government Corporation? It matters because it means that Amtrak has a special status within the government as an organization that is legally obligated to operate in the red. Simply put, they are allowed to operate while losing money on their services because they are funded by the government. This makes it easier for them to get loans from the government and to maintain a stable presence in the country. It also explains why Amtrak has traditionally been one of the most heavily subsidized forms of transportation. With the government backing them up, they don’t need to rely as heavily on their customers. Unfortunately, this also means that tickets are typically more expensive than they would be otherwise. The Consequences of Being a Government Corporation There are a few consequences of Amtrak being a government corporation. For one, Amtrak must be audited by the Federal Railroad Administration (FRA) to make sure they are operating legally. They are also required to have an emergency plan in place if there is an accident, natural disaster or other emergency. In addition, Amtrak is government owned and operated, which means that the government has the power to shut it down. While this doesn’t happen often, it does happen. Finally, Amtrak is required to provide specific services for specific regions. For instance, Amtrak operates long-distance passenger trains in the eastern part of the country. They also operate medium-distance trains in the Midwest and southern parts of the country. They do not provide any services in the western part of the country. Todd & Jack Humphrey What is Amtrak’s history? Amtrak’s history began in 1971 when the National Railroad Passenger Corporation (NRPC) was created. The NRPC existed as a “nonprofit corporation that was charged with the responsibility to provide intercity passenger rail service to the United States.” The NRPC was created because it was thought that passenger rail service would be expanded and improved in the coming decades. It was hoped that, by giving more people access to passenger rail, they would be able to take advantage of its many advantages like stopping at stations and taking trains at convenient times. Also, Amtrak hoped that this would encourage more people to use public transportation instead of driving their cars. However, when Amtrak took over the NRPC, it wasn’t given nearly enough money or resources for this purpose. It took a long time for Amtrak to get off the ground due to low funding from Congress and lack of interest from many Americans. However, once it got going in 1971, it immediately started expanding its services across several states and regions of the country with some success. However, around 1978-1979 (when Ronald Reagan took office), funding for Amtrak decreased significantly due to budget cuts during Reagan’s administration. This resulted in major layoffs for many employees and workers who had been working on construction projects across much of America. During this time period Amtrak did make some improvements such as upgrading its equipment and constructing new stations but this was not enough to save 3 Things You Should Know About Amtrak Just as the name implies, Amtrak is a passenger train service that provides transportation between major cities throughout the United States of America. It is a privately owned company that operates over 21,000 miles of track in 48 states and 3 Canadian provinces. Amtrak Is an Inexpensive Way to Travel There Are Many Types of Trains Available for Traveling Amtrak Is a Government-Subsidized Service Amtrak Is an Inexpensive Way to Travel Amtrak is an inexpensive way to travel. The average price of a one-way ticket on Amtrak is $35, which is less than the cost of a plane ticket ($65) or buses ($30). There are many ways to save money on your Amtrak journey. First, if you travel during off-peak times (which is most of the time), you can save money on your ticket. Second, if you buy tickets through Amtrak or its partners, such as AAA and Southwest airlines, they will often offer discounts on tickets. Finally, some people find it cheaper to book their tickets in advance so they can buy discounted tickets from other people who have booked ahead of time. Antony Guppy There Are Many Types of Trains Available for Traveling Amtrak offers many types of trains for both long-distance and short-distance travel within the United States. There are high-speed trains that go from coast to coast in about three hours (the "Empire Builder") and there are trains that move at a slower speed but cover longer distances (the "Cascades"). There are also trains that operate between major cities and there are trains that only go between certain cities (such as the "Pioneer"). While there are some differences between these different types of trains, they all have similar operating characteristics: They make stops along their route in every city they pass through and they usually arrive at each stop at least once every day of the week. Trains usually run for about three hours in each direction, so if you plan on getting off the train at each stop, be sure to allow enough time to get back on a later train. Amtrak Is a Government-Subsidized Service Amtrak receives most of its funding from the federal government and is subsidized by it. This means that while you do not pay directly for your ticket, you do pay taxes that are used to subsidize Amtrak's operations and indirectly subsidize your ticket price. Some people choose to purchase tickets with a credit card, which can often result in cheaper fares than tickets purchased with cash or checks because credit cards generally charge a small fee for their use (usually 2% or 3% of the purchase price). However, many people prefer saving their money in order to apply it to other expenses like buying a house or paying down student loans. If this is your preference as well, then you should consider purchasing tickets using cash or checks rather than using a credit card so that you can save more money on your ticket purchase. Is Amtrak subsidized by the federal government? Yes. And this is true of many other transportation companies and organizations as well. Indeed, 75% of Amtrak’s revenue comes from the federal government. While this may seem like a bad thing, it is actually the main reason that Amtrak exists in the first place. After all, the railroad industry isn’t profitable, so private companies don’t want to get involved with it. This means that the government has to step in and provide the funding needed to keep it running. The only difference is that because Amtrak is a government corporation, the government is required to fund the organization through loans. Thus, the money is eventually repaid. Jonathan Lee Why is Amtrak federally funded? Amtrak’s primary purpose is to connect people and places together. In doing so, it improves access to regional and long-distance travel, promotes economic growth and sustains jobs in the transportation and tourism industries. In other words, Amtrak brings people together and helps them travel throughout the country. It does this by providing affordable, efficient and safe passenger rail service in the east, Midwest and parts of the south. Is Amtrak a nonprofit? No. While Amtrak is not a nonprofit, it is a self-sustaining government corporation. This means that it is not reliant on other sources of income and has the ability to pay its own way. This is in stark contrast with most nonprofits, which exist solely on donor funds and other grants. Moreover, Amtrak’s profit goes toward paying off the loans they received from the government. Is Amtrak considered public transportation? Yes. While Amtrak is not exactly a “public” transportation system, it is considered public transportation. This means that they are bound by the same laws that apply to public transportation systems, like NYC’s MTA or Los Angeles’ Metro. Specifically, Amtrak is required to provide service to all parts of the country. It must also comply with the Americans with Disabilities Act and the Rehabilitation Act. Can you buy stock in Amtrak? Yes, you can buy stock in Amtrak. The good news is that you don’t need a lot of money to do it. You can purchase shares of Amtrak’s stock for as little as $50. The bad news is that it’s not exactly an excellent investment. Amtrak has struggled to turn a profit in recent years, so the stock is not expected to rise in value. That being said, if you are a lover of trains and would like to financially support a company that you love, you can buy stock in Amtrak and receive a shareholder’s annual report. You can also use the money you spend purchasing stock to take a train ride. Conclusion Amtrak is a great way to travel. It is safe and has good service, but it isn’t the best option for everyone. If you are looking for a comfortable and luxurious ride, look elsewhere. If you want to save money, take the bus or walk. But if you want to travel safely and enjoy yourself on the train, Amtrak is for you.