Amtrak's Economic Impact on the Intercity Bus Industry

Gao ID: PAD-79-32 January 12, 1979

The combined share of the intercity transportation market for buses and trains has been declining in recent years. In spite of the large Federal subsidies provided to Amtrak, the increased use of planes and cars have proven too competititive, resulting in lower profits and decreased service for bus companies and Amtrak. GAO's study of the fare structure of Amtrak as compared with the intercity bus system was difficult due to the differences in geographic areas, services provided, and rate structures, such as in the Northeast Corridor.

GAO believes their analysis of the state of the intercity transportation supports the following conclusions. Bus ridership would increase if Amtrak services were terminated. The effect on the bus industry from Amtrak service and fare cutbacks would depend on the industry's reaction to those changes. In such areas as the Northeast Corridor, bus ridership has been closely linked to Amtrak's fare policies. If Amtrak were to limit their future fare increases to changes in the Consumer Price Index, bus industry profits would be squeezed even more due to constantly rising expenses. Less stringent standards on bus fares by the Interstate Commerce Commission could have an impact on keeping prices competitive between the buses and Amtrak. Congress has taken steps to help the bus industry but funds have not yet been appropriated.

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