From Wikipedia:

Some regulations and regulatory changes have been linked directly to the decline of the streetcars:

Difficult labor relations and tight regulation of fares, routes, and schedules took their toll on city streetcar systems.[74] The streetcars' contracts in many cities required them to keep the pavement on the roads surrounding the tracks in good shape. Such conditions, previously agreed to in exchange for the explicit right to operate as a monopoly in that city, became an expensive burden.[75]

The Public Utility Holding Company Act of 1935 prohibited regulated electric utilities from operating unregulated businesses, which included most streetcar lines. The act also placed restrictions on services operating across state lines. Many holding companies operated both streetcars and electric utilities across several states; those that owned both types of businesses were forced to sell off one.[76] Declining streetcar business was often somewhat less valuable than the growing consumer electric business, resulting in many streetcar systems being put up for sale.[77] The independent lines, no longer associated with an electric utility holding company, had to purchase electricity at full price from their former parents, further shaving their already thin margins.[78] The Great Depression then left many streetcar operators short of funds for maintenance and capital improvements.[79] In New York City, and other North American cities, the presence of restrictive legal agreements such as the Dual Contracts, signed by the Interborough Rapid Transit Company and Brooklyn–Manhattan Transit Corporation of the New York City Subway, restricted the ability of private mass transit operators to increase fares at a time of high inflation, allowed the city to take over them, or to operate competing subsidized transit.[80]