The world today is unpredictable, but a few things remain certain: death, taxes, and renewed calls to privatize U.S. passenger rail. This time, the loudest voice making that argument is Tesla CEO and de facto Department of Government Efficiency leader Elon Musk. Speaking at a tech conference last month, Musk said the federal government “should privatize anything that can be privatized,” singling out Amtrak as “sad” and “embarrassing.” He criticized the rail service for failing to match the speed and quality of passenger trains in China, which are themselves heavily supported by the country’s centralized government.
“If you go to China, you get epic bullet train rides,” Musk said at the Morgan Stanley Technology Media & Telecom conference, according to the New York Times.
“Amtrak is a sad situation,” he added. “If you’re coming from another country, please don’t use our national rail. It’s going to leave you with a very bad impression of America.”
Those comments appear to have struck a nerve. Amtrak released a white paper that same week explicitly pushing back against calls for privatization. Less than two weeks later, CEO Stephen Gardner resigned after more than four years in the role. A Reuters report claimed Gardner was forced out for disagreeing with the incoming administration’s policy priorities. All of this suggests that efforts to spin off Amtrak—dating back to the Nixon administration—may once again have a receptive audience.
“This is a real threat,” Donald Cohen, founder and executive director of In the Public Interest, told Popular Science. “We have an administration now that wants to strip [Amtrak] down, sell it off, and make money off of it. We’re not in normal times.”
But what exactly would a fully privatized Amtrak look like—and what could that mean for travelers who rely on it for everyday transportation? While proponents of privatization argue it would boost Amtrak’s efficiency and reduce its reliance on taxpayer subsidies, experts speaking with Popular Science warn the move could do more harm than good. Passengers booking trips on a privatized Amtrak, they note, would likely face higher ticket prices, less reliable service, and a reduction or elimination of routes serving rural or low-population areas. And while a privately run national passenger rail system might generate more revenue, past evidence suggests it would still likely require government subsidies to operate reliably.
“I don’t buy the argument that there’s going to be some sort of major benefit [to U.S passenger rail] if you were to take Amtrak away as an organization,” Urban Institute principal research associate and transportation policy expert Yonah Freemark told Popular Science.
Amtrak, in its white paper, described these renewed calls for privatization as a solution searching for a problem.
“It is not clear what problem Amtrak privatization proposals are intended to solve,” the white paper reads. Amtrak did not immediately respond to Popular Science’s request for comment asking if it still stands by the statements made in that document under its new leadership.
Related: [High-speed rail trains are stalled in the US—and that might not change for a while]
Amtrak was created to fill market gaps
Amtrak was formally established by Congress in May 1970 through the Rail Passenger Service Act. The legislation allowed private railroad companies to transfer their intercity passenger lines to the government—a move that appealed to them since transporting passengers was often unprofitable compared to freight. Amtrak, a semi-private, for-profit entity primarily funded by the federal government, was created to fill the gap the private market couldn’t. Its board of directors is appointed by the U.S. president. Today, Amtrak operates roughly 140,000 miles of rail across the country.
Just as the Postal Service guarantees that Americans can receive mail no matter where they live, Amtrak, at least in theory, provides freedom of movement across the country. But Amtrak’s heavy reliance on federal and state subsidies has long made it a target for budget-cutters. Most Amtrak ridership is concentrated in two regions: the Northeast Corridor and the West Coast. That imbalance can make lawmakers from other parts of the country less inclined to support it. Still, Cohen told Popular Science he believes Amtrak offers a collective public benefit—even if individual riders don’t use it regularly.
“It’s in our [national] interest for people to be able to move around, whether you’re the one moving or not,” Cohen said. “It’ll help the economy, it’ll help the environment, it’ll help people’s lives.”
Ironically, the renewed calls for privatization come during some of Amtrak’s best-performing years on record. In 2023, Amtrak saw a record 32.8 million completed trips—a 15 percent increase from the year prior. It also generated $2.5 billion in revenue, marking a notable 9 percent year-over-year increase. Freemark noted that Amtrak’s Northeast Corridor—its most heavily trafficked route—has been profitable for several years, covering its own operations and expenses. The real cost burdens, experts say, come from long-haul routes, such as those connecting Chicago to Los Angeles, and stops in sparsely populated rural communities. One estimate by CityLab found that it costs Amtrak around $111 to complete a long-haul trip, compared to just $11 for shorter rides.
President Trump has had a contentious relationship with Amtrak. During his first term, he repeatedly pushed for deep funding cuts, particularly for long-distance routes. He also suggested that states, rather than the federal government, shoulder more of the subsidy burden for those trips. The Biden administration took the opposite approach, proposing an additional $80 billion investment in passenger rail. There are already signs that Trump’s earlier policies may return under the current administration. Just last month, the Department of Transportation abruptly cut a $63.9 million federal grant intended to help Amtrak develop a high-speed rail line connecting Houston and Dallas. U.S. Transportation Secretary Sean Duffy called the project “a waste of taxpayer funds.” The U.S. continues to lag far behind China, Japan, and much of Europe in the development of high-speed passenger rail.
What would a privatized Amtrak look like?
Cohen said groups seeking to restructure Amtrak could either attempt to purchase it outright from the government or form a public-private partnership that retains government subsidies and oversight. In the first scenario—one apparently favored by Musk—a fully privatized national rail system would likely face higher overall costs, as it would need to generate profits for investors and cover potentially higher executive compensation. To offset those expenses, Cohen said the company would likely cut costs by reducing wages or laying off workers. The added pressure to maximize profits could also lead to cost-cutting in safety measures. Reductions in staffing and management, he warned, could further increase safety risks. Standard ticket prices, he added, would also likely rise.
“You’re adding costs that are not related to providing the service,” Cohen said. “There’s only two things that can happen there. One is that prices can go up, or corners can be cut.”
“This is just math,” he added.
Another likely consequence of a fully privatized U.S. passenger rail system is the elimination of service to less frequently traveled routes. Without hefty federal or state subsidies, a private rail operator would have little financial incentive to continue serving sparsely populated areas. On paper, these routes might appear to be “inefficient” targets for cost-cutting. Yet many of these smaller cities and rural communities rely on Amtrak now more than ever, especially as major airlines continue scaling back service. In just the past five years, Ganesh Sitaraman notes in his 2023 book Why Flying Is Miserable: And How to Fix It, American, Delta, and United have dropped service to 59 cities.
“There would be a massive elimination in services,” Freemark said, remarking on the possible impact of rail privatization.
We’ve been here before
Cohen points to several real-world examples of privatization that he says should serve as cautionary tales. In 2008, Chicago’s mayor signed a 75-year agreement with parking management company LAZ Parking to take over operations and management of the city’s 36,000 parking meters. Many of the rationales for that decision echoed those now being used to justify privatizing Amtrak. But Cohen says the deal quickly became problematic. Under the agreement, the city was required to compensate LAZ whenever it wanted to make changes involving those meters. That meant Chicago faced a new financial and bureaucratic hurdle whenever it sought to take simple actions like expanding bike lanes or adding new bus routes along roads with metered parking.
“They [lawmakers] are limited [in decision-making] because they have to keep the parking meter company and the investors whole,” Cohen said.
There are also rail-specific examples to consider. In the 1990s, Great Britain privatized its national rail service, successfully spinning off British Rail into dozens of franchises. But the decision almost immediately resulted in higher and worse service. Now, nearly three decades later, Britain is looking to re-nationalize its rail service. Experts told Popular Science there’s also no guarantee that a privatized replacement for Amtrak wouldn’t end up relying on government subsidies down the line. Brightline, a private passenger rail company that recently completed Florida’s first high-speed rail system, accepted $3 billion in grants from the Federal Railroad Administration (FRA) to help complete a new line linking Southern California to Las Vegas.
In the end, Cohen and Freemark said a future traveller booking a trip on a fully privatized Amtrak service would have to spend more on their ticket, would likely get nickel-and-dimed for additional services or upgrades, and might not be able to travel to as many parts of the country. And even if the government determines those tradeoffs are worth it to drive efficiency, a privately run national rail service would likely still end up collecting state and federal subsidies of some kind. What you’re left with then, Cohen noted, is a government-supported private company with higher prices and reduced services. Or in other words, a worse version of Amtrak than exists today.
This story is part of Popular Science’s Ask Us Anything series, where we answer your most outlandish, mind-burning questions, from the ordinary to the off-the-wall. Have something you’ve always wanted to know? Ask us.
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