Project 2025 called for the privatization of all sorts of government agencies and services, and Elon Musk—who has been helping enact that plan—said this week that the U.S. should privatize Amtrak specifically, calling the national passenger rail service a “sad situation.”
It’s not the first time Amtrak privatization has been suggested, or that the rail system has been criticized. Train travel in the U.S. is notoriously lacking: Huge regions of the country aren’t serviced by rail; trains are often delayed or have infrastructure issues; and tickets can be expensive, making driving or even flying more affordable for many people.
But privatization wouldn’t solve those issues, experts say. Instead, it could add operational costs, deteriorate service, result in higher fairs, and still leave the system unprofitable. Musk’s interest in privatization is another example of the way he has tried to kill government-funded transportation to serve his own interests, notably his Hyperloop project, which undermined high-speed rail efforts in California.
Musk’s conflicts of interest
Musk and his so-called Department of Government Efficiency have taken unprecedented steps to shrink the federal government. While dismantling those services, Musk has also attempted to further his own companies, for example pushing his Starlink broadband product as a solution to outdated air-traffic control systems. Musk has also targeted agencies that specifically investigated or fined his companies.
“[Musk] has some power and authority, it seems now, to sell off pieces of federal work and assets, but he also seems to have his hand out to get some of these contracts,” says Donald Cohen, director of In the Public Interest, a nonprofit research and advocacy group, and author of The Privatization of Everything: How the Plunder of Public Goods Transformed America and How We Can Fight Back. “Just because of that, he’s not the right voice to be listening to on how to make government better, because he’s clearly got some interest in getting his hands on multibillion-dollar contracts.”
In a 2015 biography of Musk, author Ashlee Vance wrote that part of Musk’s motivations behind announcing the Hyperloop were to force the cancellation of California’s high-speed rail development. (Despite getting hundreds of millions of dollars in funding—even some from the 2021 infrastructure bill—the Hyperloop company shut down in 2023.) Musk has voiced animosity toward mass transit for years, instead sharing his preference for private cars. And he has an interest, of course, in selling Teslas.
Privatized Amtrak: Higher costs, worse service, safety concerns
Still, Musk isn’t the only one to suggest privatizing Amtrak; it’s been a conservative talking point for years. In 2003, urban planning expert Elliott Sclar wrote a report for the Economic Policy Institute in response to that faction, called Amtrak Privatization: The Route to Failure. “The passenger rail service is blamed for failing to show a profit,” he wrote. But this insistence that Amtrak should be profitable “is an effort to impose a highly selective business model on what is really a public service.”
If Amtrak were privatized, it could actually mean fewer rail options for the country. A private model would likely eliminate rural routes with low ridership that don’t make as much money as more popular ones. (Amtrak’s state-sponsored routes, in contrast, don’t have profit goals because the states simply want to provide residents with ridership options.)
Cohen points to the privatization of hospitals as an example of this effect: “Rural hospitals are closing because there aren’t enough patients,” he says. “The market is exactly the wrong place to put something if you want a rail transportation system that meets the needs of all of America.”
Amtrak has a unique structure; technically it operates as a for-profit company, not a public authority, but the president appoints its board of directors and the federal government is its majority stockholder. It also gets funding from both federal and state sources depending on the type of route.
Privatizing Amtrak wouldn’t necessarily make it cheaper to operate—which is true for any entity, as all the business expenses (executive compensation, shareholder returns, debt) would still be there, plus a private company would seek to maximize profits by cutting costs and charging more. That could happen by paying workers less, reducing staffing, or cutting corners that would affect safety. Employing fewer workers is a safety issue itself, because overworking a short staff can lead to fatigue and errors, an issue the freight rail industry has been dealing with in recent years.
After cutting costs, a privatized Amtrak could also raise prices for consumers—either on tickets, or by adding extra charges for things like baggage. We’ve already seen private airlines take these steps, increasing baggage fees and charging other “junk fees” on top of base ticket prices. It’s also often more expensive to fly to a smaller town or “spoke city” than to a major airport hub, because—just like for rural rail lines—the demand for those routes isn’t as high.
The privatization of British Rail is an example of these impacts, and is largely seen as a failure. Once state-owned, British Rail was privatized in the early 1990s by the right-wing Tory government. Afterward, one union report revealed that at least 1.5 billion pounds (nearly $2 million) “leaks out of Britain’s railways every year” because of its operating companies, subcontractors, or other costs; little of that is reinvested in the railway. For passengers, rail costs in Britain are almost 8% higher than they were before privatization. After privatization, British Rail also experienced notable safety issues, including four fatal accidents that led to 49 deaths. Britain has since reversed course, passing a bill in 2024 to renationalize its rail services.
Privatizing Amtrak wouldn’t totally erase the need for federal transit funding, either. Brightline West, a private high-speed rail line in the works between Las Vegas and Rancho Cucamonga, California, once said that project would require “no capital or operating funding from the government.” But it’s since sought, and received, a $3 billion federal grant. If private companies took over Amtrak, they also wouldn’t have the right to operate on freight tracks, which own 97% of Amtrak’s route network. Amtrak has that right through federal statutes, but it’s not transferable to private companies.
Amtrak is almost profitable—but that’s not the point
Though Amtrak has never made a profit, its business has been growing. The rail service saw an all-time high ridership record in 2024, and has plans to double its ridership by 2040. “Amtrak’s business performance is strong. Ridership and revenue are at all-time highs, and transformative projects are underway that will greatly improve the customer experience,” a spokesperson told Fast Company. By maintaining this momentum, Amtrak says it’s “on track to reach operational profitability—for the first time in history—during this administration.”
Privatizing Amtrak now could jeopardize that progress, Cohen says. But still, profitability isn’t the point, especially when you consider the benefit rail transportation provides. This goes back to the idea of Amtrak being a public service—even a public good. By Cohen’s definition, to be a public good a service shouldn’t be something we need individually, but rather something everyone needs, and something that we all benefit from having.
Even if someone doesn’t have children, for example, public education benefits them because it’s in everyone’s interest to have an educated nation. The same argument could be made for transportation. Train travel options help prevent more car and air travel, which have disastrous environmental effects, and which come with other costs like traffic. Rail also helps people live in many different places, or be able to travel around for tourism. “For mobility, for transit, it’s in our interest for people to get to work,” Cohen says, “without polluting our environment.”
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