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At some points they have a clear speed and/or capacity advantage, and at other times not so much. One of the disadvantages that trams often have is there long length compared to buses with similar capacities. In the 1950s for instance, while using the european set, the trams have a very small speed/capacity advantage but take up more than twice as much space. That can be very problematic on a line where you have so many vehicles that adding more won't help anymore with alleviating the amount of passengers. In such a case having vehicles with slightly less capacity but a much smaller size will be much better as it will allow you to have a lot more vehicles on the line before they start getting in each others way.
Very strange problem there, never had it be that way.
Trams generally are better throughout the game, only at the "end game" aka, no more new things coming out, are they slightly worse then buses. Late Game Trams are slower then buses but the benefit of control over where they go far out weights any drawbacks.
I prefer trams unless I am starting in 1850, then I use buses, and sometimes I go back and upgrade cities to trams. Issue here is in 1850 you don't get electric trams, just horse or steam(EU) trams. While these are good to use, the issue lies in having to upgrade the roads TWICE, once for tram track, and a second time for Electric Tram Track. This is quite an annoyance and one more extra thing to micro manage when the time comes.
HOWEVER, during early game play like in 1850 or 1900, Trams have longer lifespans, meaning you don't need to replace them as often as buses. Mid/Late game (1950+) this becomes a mute point as both bus and tram have the same lifespans as one another, but its a key thing to keep in mind when starting out a new game.
The game will auto adjust any route you set to be the most efficient (shortest) point between two stops/stations, ect that you set. when you make a tram route, and put trams on it, the route will auto adjust to follow the roads that have been upgraded with tracks. Rather then trying to follow its own path, it will follow your path you made for it.
Usually bus routes will try to take small roads as shortcuts between two stops, Trams can't and won't do that because they have to follow the track.
Looking at the American vehicle set, up until the 1920's (as that up to where I have comparable data up to), Trams have a higher price (and running costs) for equivalent speed buses, but have slightly more capacity. Loading speed would also be an important factor for in city routes. Getting people on or off faster means less time stopped, and more overall time moving.
You also tend to get the new Trams earlier than the equivalent buses, so going trams can get you the speed upgrade, and thus price per km increase sooner.
Stage Coach (1875) vs Horse Trolley Car (1871) * Also Stage Coach is 18kph vs 20kph for the Tram
Mack (1900) vs San Diego Electric Trolley (1893)
Schneider PB2 (1921) vs Peter Witt Streetcar (1917)
I go the opposite, using trams between cities, and IF I need to run a bus around I'll use that until I can justify trams.