The streetcar companies were losing lots of money. Only a few heavily traveled lines in big cities were profitable. The streetcar companies had to maintain their tracks and overhead wires, and often were required to also pave the streets they ran on. Private rights-of-way were quite rare, so growing auto traffic slowed the streetcars quite a bit. Labor contracts often required two men per car, and local governments would not approve needed fare increases.

The traction companies were often seen as corrupt and rapacious profiteers, so there was little public sympathy for their problems. Only a couple of US cities were willing to consider public ownership. When companies converted routes to buses, they often halved their labor costs, and eliminated their maintenance-of-way costs (because the cities paid for the streets). Though the phenomenon proved short-lived, patronage often went up as riders found the new curb-loading smooth-riding buses preferable to 40-year-old rattletrap streetcars they had to board in the center of the street. Many streetcar lines were cross-subsidized by real estate ventures, or had the backing of electric utilities who sold them power. When the 1935 Public Utilities Holding Company Act forced electric utilities to divest their transit franchises, it was often the last straw.

A lot of modern sources in this field are focused on a single city, or on debunking the "Great Streetcar Conspiracy" fabricated in the 1970s by Bradford Snell. But the challenges faced by the traction industry were well recounted in the industry's trade journals. A useful nationwide view can be found in the 1950 book from the Public Administration Service called Transit Modernization and Street Traffic Control, which is extremely thorough in explaining why virtually all streetcar systems should be converted to buses.