Huntington's involvement with urban rail was intimately tied to his real estate development operations.
Real estate development was so lucrative for Huntington and SP that they could use the Red Car as a loss leader.
However, by 1920, when most of the company's holdings had been developed, their major income source began to deplete.
Many rural passenger lines were unprofitable, with losses offset by revenue generated from passenger lines in populated corridors and from freight operations.
The least-used Red Car lines were converted to cheaper bus routes as early as 1925.

In the pre-automobile era, electric interurban rail was the most economical way to connect outlying suburban and exurban parcels to central cities.

Although the railway owned extensive private roadbeds, usually between urban areas, much PE trackage in urban areas such as downtown Los Angeles west of the Los Angeles River was in streets shared with automobiles and trucks.
Virtually all street crossings were at-grade, and increasing automobile traffic led to decreasing Red Car speeds on much of its trackage.
 At its nadir, the busy Santa Monica Boulevard line, which connected Los Angeles to Hollywood and on to Beverly Hills and Santa Monica, had an average speed of 13 miles per hour (21 km/h)
Traffic congestion was of such great concern by the late 1930s that the influential Automobile Club of Southern California engineered an elaborate plan to create an elevated freeway-type Motorway System, a key aspect of which was the dismantling of the streetcar lines, replacing them with buses that could run on both local streets and on the new express roads.

When the freeway system was planned in the 1930s the city planners planned to include interurban tracks in the center margin of each freeway but the plan was never implemented.
There was one exception that was within the Ventura Freeway through Cahuenga Pass.
The San Fernando Valley line from Hollywood took to the center of the Freeway over the pass and exited at Lankershim Boulevard.
When that service was terminated, the freeway was expanded onto the former PE roadbed.

The Whittier & Fullerton line was cut in 1938, Redondo Beach, Newport Beach, Sawtelle via San Vicente, and Riverside in 1940.
When the San Bernardino Freeway opened in 1941 but was not yet connected to the Hollywood Freeway, while the "Four Way" overpass was being constructed, westbound car traffic from the SB freeway poured onto downtown streets near the present Union Station.
PE's multiple car trains coming and going from Pasadena, Sierra Madre, and Monrovia/Glendora used those same streets the final few miles from private right-of-way to reach the 6th and Main PE terminal and were bogged down within this jammed traffic.
Schedules could not be met, plus former patrons were now driving.
The San Bernardino line, Pomona branch, Temple City branch via Alhambra's Main St., San Bernardino's Mountain View local to 34th St., Santa Monica Blvd.
via Beverly Hills, and all remaining Pasadena local services were all cut in 1941.
Permission was received in September 1942 to abandon the shuttle line to General Hospital which company officials said had been operating at a loss for several months.

The Glendale line survived to the early 1950s due to the convenience of a subway into downtown Los Angeles and used the company's only modern equipment, a group of streamlined PCC cars.
In 1940, Pacific Electric sold its Glendale, Burbank, and Pasadena operations to Pacific City Lines.
San Bernardino operations were sold to San Bernardino Valley Transit.

PE carried increased passenger loads during World War II, when Los Angeles County's population nearly doubled as war industries concentrated in the region attracting millions of workers.
There were several years when the company's income statement showed a profit when gasoline was rationed and much of the populace depended on mass transit.
At peak operation toward the end of the war, the PE dispatched over 10,000 trains daily and was a major employer in Southern California.
However, the equipment in use was old and
Huntington's involvement with urban rail was intimately tied to his real estate development operations. Real estate development was so lucrative for Huntington and SP that they could use the Red Car as a loss leader. However, by 1920, when most of the company's holdings had been developed, their major income source began to deplete. Many rural passenger lines were unprofitable, with losses offset by revenue generated from passenger lines in populated corridors and from freight operations. The least-used Red Car lines were converted to cheaper bus routes as early as 1925.
In the pre-automobile era, electric interurban rail was the most economical way to connect outlying suburban and exurban parcels to central cities.
Although the railway owned extensive private roadbeds, usually between urban areas, much PE trackage in urban areas such as downtown Los Angeles west of the Los Angeles River was in streets shared with automobiles and trucks. Virtually all street crossings were at-grade, and increasing automobile traffic led to decreasing Red Car speeds on much of its trackage.  At its nadir, the busy Santa Monica Boulevard line, which connected Los Angeles to Hollywood and on to Beverly Hills and Santa Monica, had an average speed of 13 miles per hour (21 km/h)
Traffic congestion was of such great concern by the late 1930s that the influential Automobile Club of Southern California engineered an elaborate plan to create an elevated freeway-type Motorway System, a key aspect of which was the dismantling of the streetcar lines, replacing them with buses that could run on both local streets and on the new express roads.
When the freeway system was planned in the 1930s the city planners planned to include interurban tracks in the center margin of each freeway but the plan was never implemented. There was one exception that was within the Ventura Freeway through Cahuenga Pass. The San Fernando Valley line from Hollywood took to the center of the Freeway over the pass and exited at Lankershim Boulevard. When that service was terminated, the freeway was expanded onto the former PE roadbed.
The Whittier & Fullerton line was cut in 1938, Redondo Beach, Newport Beach, Sawtelle via San Vicente, and Riverside in 1940. When the San Bernardino Freeway opened in 1941 but was not yet connected to the Hollywood Freeway, while the "Four Way" overpass was being constructed, westbound car traffic from the SB freeway poured onto downtown streets near the present Union Station. PE's multiple car trains coming and going from Pasadena, Sierra Madre, and Monrovia/Glendora used those same streets the final few miles from private right-of-way to reach the 6th and Main PE terminal and were bogged down within this jammed traffic. Schedules could not be met, plus former patrons were now driving. The San Bernardino line, Pomona branch, Temple City branch via Alhambra's Main St., San Bernardino's Mountain View local to 34th St., Santa Monica Blvd. via Beverly Hills, and all remaining Pasadena local services were all cut in 1941. Permission was received in September 1942 to abandon the shuttle line to General Hospital which company officials said had been operating at a loss for several months. 
The Glendale line survived to the early 1950s due to the convenience of a subway into downtown Los Angeles and used the company's only modern equipment, a group of streamlined PCC cars. In 1940, Pacific Electric sold its Glendale, Burbank, and Pasadena operations to Pacific City Lines. San Bernardino operations were sold to San Bernardino Valley Transit.
PE carried increased passenger loads during World War II, when Los Angeles County's population nearly doubled as war industries concentrated in the region attracting millions of workers. There were several years when the company's income statement showed a profit when gasoline was rationed and much of the populace depended on mass transit. At peak operation toward the end of the war, the PE dispatched over 10,000 trains daily and was a major employer in Southern California. However, the equipment in use was old and 
Pacific Electric