The Bombay Tramway Company was set up in 1873. After a contract was signed between the Bombay Tramway Company, the municipality and the Stearns and Kitteredge company, the Bombay Presidency enacted the Bombay Tramways Act, 1874 licensing the company to run a horsecar tram service in the city. 

On 9 May 1874, the first horse-drawn carriage made its début in the city, plying the Colaba–Pydhone via Crawford Market, and Bori Bunder to Pydhonie via Kalbadevi routes.

In 1905, the Bombay Electric Supply and Tramway Company (BEST) was formed. Two years later, the first electric tram debuted in the city. To ease rush-hour traffic, double-decker trams were introduced in September 1920. The trams met travellers' needs until the betterment of the city's train network, and the service closed on 31 March 1964.