Transportation Deployment Casebook/2021/Illinois Streetcar

State Illinois located in the northwest of the US, sitting between the Mississippi River and the Great Lakes. The unique location had given it an edge in transportation development. Chicago, as the transportation terminal, had benefited the most. A large amount of immigration had led to great transport demand and market niche. Chicago experienced the transition of streetcars from horse-drawn to cable griped, to electric-powered, the streetcar system thrived from the 1860s to 1920s, but eventually gave way to the automobile, but its signature elevated rapid transit system maintained till today.[1]

Early transport sceneEdit

The transportation history in state Illinois started from the construction of the Michigan Canal in the 1830s, which connected Lake Michigan with the Mississippi River. The canal made a great contribution to the local agricultural industry by providing the freshwater for farming, moreover, it ran as a busy freight route, the cargo included grains, livestock, and lumber, as a result, it made Chicago the biggest transportation terminal in Midwest US at that period.[2]

Nevertheless, there is some limitation for canal transport. The canal operation can be restrained by extreme weather conditions, therefore the Michigan canal only operated 240 days per year and was closed throughout winter. Furthermore, the canal was mostly used for freight transport, the market niche of passenger transport remains unfilled.[2]

Technology developmentEdit

In 1854, the Rock Island railroad was built alongside the canal to run passenger transport. For transport in Chicago city, a horse-drawn omnibus was introduced in 1852, which is a large carriage capable of fitting 30 people. And in 1859, the first horse-railway in Chicago was built, it was a single-track rail, with one horse powering one coach. Thus the street railway system began to operate in the city. Soon the system developed a two horse-drawn, double-track railway. The animal-powered railway system has many limitations, the potential market for passenger transport is too large for street railway to catch up. Also, animals can only last few years of heavy work, and thousands of horses had left a large amount of manure on the street.[3][4]

Therefore, the street railway system introduced cable cars in 1882 as the ‘Iron Horses’. Instead of hauled by horses, streetcars used a clutch to get dragged by the constantly moving cable buried underneath the rail. The cable was planted to form a circle so that a power station can provide grip and keep it running continuously. The powerhouse on Clark Street in Chicago equipped 4 steam engines, each bringing 500 horsepower to independent circles. Those circles formed the famous Chicago 'loop', which is the central business district, the combination of commerce, industry, and service. The success of the cable line had encouraged its extension, eventually it reached more than 80 miles and became the largest such system in the world.[4][5]

Although electric streetcar was proved doable in 1888, they are not allowed to operate in Chicago until 1890 due to safety concerns. After 1890, people began to replace cable streetcars with electric streetcars for cheaper operational costs and larger capacity to accommodate more passengers.[1]

Market developmentEdit

Since the completion of the Michigan Canal in 1848, state Illinois had attracted a huge amount of freight and passenger traffic. Since then, Chicago had experienced a population boost. In 1850 its population is 29,963, ranked 24th in US, in the next decade following the operation of the Canal, this number had quadrupled to 112,172, ranked 9th in US. This is when the first horse-drawn streetcar was introduced in Chicago. The first market niche is providing fast and affordable passenger transport within the city.[2][6]

By 1880, the population had reached 503,185, ranked 4th in US. Chicago has become one of the most crowded city in US, the increasing passenger transport demand provided a huge market niche, and horse streetcar cannot accommodate the need, thus cable streetcar fit in the market. By 1890, as Chicago population reached 1,099,850, ranked second in US, the streetcar also upgraded to electric powered to provide service to more people.[6]

Along with the technology upgrade, more people were served by the streetcar system, and it helped to explore new markets. The city was able to expand because dwellers were willing to move to new suburbs with streetcar connections. Moreover, Real estate builders were keen to introduce a streetcar system to promote the selling. These positive influences had helped to develop the streetcar market.[1]


After the Civil war, the federal government intended to form a strong central government, and to promote economic growth, it was determined to expand the railway network to more distant lands. The financing of this national enterprise came from both public and private sectors. The federal government adopted the promotion policy, which provides land grants for railroads to encourage private investigation.[7]

The policy for streetcars followed this precursor model, the development and operation of street railways stayed a private and competitive enterprise from the beginning. Regulations were given so that only specific business activities were allowed. Franchises were also issued to specific operators to give permission to run in certain locations. The franchise was actually a permission of monopoly of operation, this was to compensate the private transit company due to the heavy initial investment on construction and facilities. Furthermore, regulations specified the fixed price among operators and the quality and quantity of the service, thus keeping the industry honest and transparent, and service affordable.[8]

In Chicago, private sectors played an important role in forming the city transit system. The huge market niche had attracted many transit companies, all of them applied permits to lay track in districts with demand, as well as undeveloped areas where they see potential. Also, fierce competition drove companies to adopt new technologies and keep upgrading their system to provide better service. Thus the authority was also keen to grant franchise and pass ordinances.[1]


Since more and more streetcar companies existed in Chicago, the streetcar system had been established in the city's West, North and South sides. In 1892, the first elevated passenger railway was constructed over the street on South side, and emulation followed in West and North sides in 1897. This is the famous 'L'(short for 'elevation')line in Chicago.

As the streetcar becoming increasingly important to the public, voices were arguing that key infrastructure should be owned by the public to provide better service but lower cost, and the transit business should be non-profitable. However, the scale of economy of transit companies was so large, it would take Chicago decades to afford to purchase and municipalize. Instead, a unified rate charge policy was issued in 1904 to keep the ride fare constant at 5 cents, and this policy continued for decades throughout World War II, despite the inflation and increasing operating cost. This had put much pressure on private transit companies.[9]

This policy also leads to another issue. Different classes of passengers seek differentiated service, "You can't mix silk stocking with picks and shovels" quote from Chicago Railway President John Roach. Therefore, the streetcar used to have different arrangements according to class, under the direction streetcars were sent directly to CBD from middle-class neighborhood. The flat rate and unified arrangement have forced these wealthier class to seek other transit options to meet their demand.[10]

Since early 1900s, automobile industry began to develop. And people who can afford a car tend to drive to commute. By 1920 the street was so crowded, and heavy traffic congestion has caused the streetcar system impossible to catch up with the schedule, hourly delays often occurred. To ease the traffic congestion, Chicago announced several traffic control policies. Streetcars were re-routed, left-turn was not allowed in CBD, restricted on-street parking, and increased facility for off-street parking, and coordinated traffic signal control. These regulations had been very effective and beneficial.[7]

Struggle and surviveEdit

As the automobile industry thrived, the streetcar enterprise decline. From 1907 to 1937, over 340 million dollars from public sector were invested in street improvement and road pavement. For the streetcar system, in 1937 an engineering report points out that “the equipment was old, inadequate service produced dangerous overcrowding, and routes were obsolete”. The bad financial status of streetcar companies made it very hard for them to keep maintenance and upgrade the technology. Moreover, when the conductor reported decline of ridership, the streetcar company cut those lines to save costs, which increase the distance between each ride and increase the waiting time, and further deteriorate the situation. In addition, the old planning of rail cannot catch up with the expanding of the city, people cannot get to the destination directly, and result with 85% of passengers have to transfer on each trip.[7][10]

These factors had led streetcar unfavorable over time. In 1947, the city of Chicago purchased the rapid transit company and other surface lines, then combine together forming the Chicago Transit Authority (CTA). Still, the transit business was asked to maintain financially self-sufficient, therefore the riders have to pay for all the maintenance and upgrades, which leads to increased ride fares and service cuts.[1]

CTA tried a series of innovations to compete with driving. Funds were spent on new rail lines and upgrading infrastructure and vehicles. And to encourage transfer, CTA also pioneered the development of integrated transportation of rapid transit, buses and roadways. Furthermore, CTA tore down many old facilities and replaced with modernized version to attract customers; CTA also modernized its bus fleet with Liquefied Petroleum Gas (LPG) fuel, thus saving a large amount of operating cost. After all the efforts, still streetcars stopped the service and give way to automobile in 1958, but the 'L' rapid transit system and CTA survived.[1]

Quantitative analysisEdit

A detailed record of streetcar system operation data from 1894 to 1920 was given, including the population in each town, plant and equipment of each railway company. Data was extracted from state Illinois chapter, and in this analysis, the logistic curve model is used to describe the growth curve pattern. From the analysis, the life-cycle of the streetcar can be identified. Following is the explanation of the S-curve (status vs time).


Note: f = S(t)/K

  • S(t) is the technology size (in this case the miles of track planted)
  • K is the final market size (need to be assumed at first, and use Excel Goal Seek to find the optimal value)
  • t refers to time

logarithm applied to both side:


According to collected data, the left side of the equation can be worked out, so a Linear regression model can be applied to solve parameter a & b. Therefore, the predicted S curve can be expressed as followed:



  • ti is the midpoint of the lifecycle, where K/2 is reached ( ti = b/a )
  • Following is the graph that shows the difference between real data and prediction.

Illinois State streetcar running status:Edit

Parameter Table

Final Market Size K 5357.4
Intercept b -266.97
Slope -a 0.14
R square rsq 0.87
Midpoint time ti 1904.86

As can be seen from the graph, the real developing speed of streetcar in state Illinois is faster than prediction, especially in the early 1900s, when the electric streetcar started to enter the market. According to the data, a lot of smaller town including Aurora, Peoria and Joliet began to equip their own streetcar system at that time. The developing speed decline in late 1910s.

Chicago streetcar running status:Edit

Parameter Table

Final Market Size K 2333.7
Intercept b -206.36
Slope -a 0.11
R square rsq 0.88
Midpoint time ti 1900.94

The streetcar developing speed in Chicago remains strong during the study period, the historical document could reflect this as Chicago owned the largest streetcar network at that time, the streetcar mileage kept increasing as the city expanded. The curve is close to the forecast line and shows stability.

East St. Louis streetcar running status:Edit

Parameter Table

Final Market Size K 444.3
Intercept b -434.44
Slope -a 0.23
R square rsq 0.86
Midpoint time ti 1911.58

The scale of streetcar system in East St. Louis is much smaller than Chicago, but it shows a closer fit to logistic curve. The late midpoint time indicates that the development of streetcar is quite late in this town, but the developing speed is quick as can be seen from the graph.


  1. a b c d e f Chicago, the Transit Metropolis. National Museum of American History. Retrieved 2021-03-21.
  2. a b c Illinois and Michigan Canal. U.S. National Park Service. Retrieved 2022-03-20.
  3. Horse Railways of Chicago. Chicagology. Retrieved 2021-03-20
  4. a b Street Railways. The Encyclopedia of Chicago. Retrieved 2021-03-19
  5. Cable Cars in Chicago. Chicagology. Retrieved 2021-03-20.
  6. a b Illinois State Demographics. Chicago, Illinois Population History 1840 – 2019. Retrieved 2021-03-23
  7. a b c Brar, Amritbir Kaur (2005). "Transportation Culture and Policies in the US". Economic and Political Weekly . Vol. 40, No. 8, pp. 733-736. Retrieved 2021-03-21.
  8. Smerk, George M. (1986). "Urban Mass Transportation: From Private to Public to Privatization". Transportation Journal .Vol. 26, No. 1, pp. 83-91. Retrieved 2021-03-21
  9. Stromberg, Joseph (2015-05-07). "The real story behind the demise of America's once-mighty streetcars". Vox. Retrieved 2022-03-21.
  10. a b Barrett, Paul (1975). Public Policy and Private Choice: Mass Transit and the Automobile in Chicago between the Wars. The Business History Review, Vol. 49, No. 4, pp.473-497. Retrieved 2021-03-21