The ScotRail franchise has been described as a “shambles” amid calls for the Scottish Government to end the agreement.
Scottish Labour called for a debate on the issue at Holyrood on Wednesday, however the party lost a vote on whether to enact a break clause in the franchise.
The party has campaigned for railway services in the country to be taken back into public ownership at the earliest opportunity.
Dutch operator Abellio began a 10-year contract to run the franchise in 2015, although the Scottish Government can exercise an opportunity in 2020 to end the franchise by its first expiry date in 2022.
Figures released last month put ScotRail’s performance level at its lowest since the franchise began.
Moving the motion, Colin Smyth MSP said: “Under the fragmented, privatised rail system we have today, public transport has become detached from public service.
“Our trains should be essential services, instead they’re being used simply as an opportunity for profit by private companies.”
But MSPs voted by 85 to 34 against Mr Smyth’s motion to end the franchise agreement.
He said: “Hard pressed passengers across the country will be disgusted to see the SNP and the Tories block Labour’s plans to end the privatisation of Scotland’s railways.
“Abellio was supposed to be a world leading contract for ScotRail. Instead passengers are suffering from overpriced, overcrowded trains that are frequently cancelled.
“Time and time again the SNP choose not to use Holyrood’s substantial powers in the interests of the many, not the few.
The Scottish Government noted that the punctuality and reliability of ScotRail’s services had fallen below agreed performance targets.
Connectivity minister Paul Wheelhouse said: “The Scottish Government has been clear in our ambition to ensure Scotland’s railways deliver a world class service across the country.
“There continues to be significant challenges in both Network Rail and ScotRail’s ability to meet the Government’s challenging, but achievable, service performance targets.
“However it’s also very important not to lose sight of the significant improvements that ScotRail has already delivered and of the further transformational improvements this contract is on the cusp of delivering for Scotland.”
Scottish Conservative transport spokesman Jamie Greene said: “Does Mr Wheelhouse really believe what he was reading out in that speech, because passengers out there watching this today will be wondering what planet he’s living on?”
Asked by Mr Wheelhouse to acknowledge improvements in the rolling stock, Mr Greene responded: “So we’ve got new rolling stock, I’ve been on them – great carriages.
“But that does not in any way account for the many problems that people are facing right across Scotland…
“People on crowded trains that can’t get a seat, what’s the new carriage going to do for them when there are no seats available?”
He told the chamber he is sympathetic to the point behind Labour’s motion but said he could not support it.
“We have no way of predicting what the quality of service will be in 2020. It’s impossible to pre-empt whether or not the break clause should or should not be applied at that time,” he said.
He added: “I don’t have the same confidence in this Government that they could take over as operator of last resort.”
A spokesman for Abellio said: “We welcome the Scottish Parliament vote this afternoon, which supports Abellio’s transformational investment in Scotland’s railway.
“Challenges remain but Abellio is focused on the job of delivering our £475 million investment in new electric and high-speed trains, which will bring major improvements to Scottish passengers, businesses and communities.
“Combined with action to improve infrastructure – the responsibility of Network Rail – we believe we can deliver the best railway Scotland has ever had.”