While each system is different, streetcar projects are typically driven by the need to provide attractive short-trip urban circulation, while facilitating economic development. A streetcar is a proven way to attract "choice" riders (riders who have ready access to a car and are not transit dependent), a significant advantage over rubber-tired alternatives. By connecting together key activity centers, parking and other forms of transit with convenient service levels, the streetcar becomes the key to creating a vibrant cityscape that is attractive to all. Visitors and residents alike can see and do more within a given district when a convenient streetcar service links many of their destinations together. Stops are spaced relatively close together, and the streetcar thus becomes a "pedestrian accelerator", facilitating trips that are part walking, part streetcar.

In addition to their mobility benefits, streetcars with well-planned routes have an excellent track record of being a catalyst for positive urban change. The fixed nature of the rail infrastructure implies permanence- it's going to be there as a community resource for the long run. This can be a key ingredient in helping communities maximize public/private investment. The streetcar is also highly visible, has an easily understood route, and the quiet, pollution-free electric vehicles blend in well with the community.

Streetcar systems are also much less expensive to build and operate than conventional rail systems. Infrastructure is simpler, consistent with the lower speeds and circulator function. Because it is easily integrated into the built urban environment, streetcars cost significantly less per mile than higher capacity, longer-distance Light Rail systems. Both have their roles to play in the public transit arena of course, and some cities are using a streetcar as a precursor to a new Light Rail system, offering a low-cost "demonstrator" line that can later be extended or incorporated into a larger system.