According to economic historians, streetcars in southern cities in the early 1900s were racially segregated because the owners of the firms believed that segregation raised the firms' profits.

Economic historians argue that streetcar companies in the early 1900s were generally opposed to segregation because they believed it would increase their costs (for example, by requiring more cars or by alienating black customers who made up a significant portion of their ridership) and did not increase profits. Segregation was typically imposed by city ordinances or state laws, rather than being a choice made by the companies for economic reasons.