Ever since the opening in 1888, The Peak Tram has undergone various phases of modernisation, evolving from coal-fired steam boilers to today's microprocessor-controlled electric drive system.

The Peak Tram, a double reversible funicular system, still runs on its original railway track but it has undergone a complete modernisation programme to upgrade its operating system and machinery. Today, the Peak Tram uses a microprocessor-controlled electric motor that automatically manages the tramcar speed, accelerating and braking accordingly at each of the tram stations.

With a maximum speed of six metres per second, the tramcar operating system is equipped with three separate braking systems: Normal Stop Mode, Service Stop Mode and Emergency Stop Mode. Normal Stop is achieved by allowing gentle deceleration which is controlled through the microprocessor. Service Stop uses regulated braking, for a constant deceleration rate, to avoid a potential hazard in situations where it would be too late to use Normal Stop. If safety is endangered, the emergency stop is used to stop the tramcar in the shortest possible time by braking the haulage drum at full force. The emergency brake will also be applied if: the service brake fails, the tramcar exceeds the normal speed by 15 per cent, or the haulage rope slackens.

Two haulage ropes are used which have a diameter of 44 millimetres and can hold up to 139 tonnes. The steepest part of the route, where the tracks cross-over on May Road, is 27 degrees to the horizontal. The track is 1,365 metres long and the tramcar takes approximately seven minutes to complete a one way trip. The Tramcar carries up to 120 passengers: 95 seated and 25 standing. Two tramcars run in opposite directions for over 90 trips each day. The unique waveform floor is specially designed for the safety and comfort of standing passengers. Both tramcars start to operate simultaneously after an automatic safety device check is carried out before each journey.

The latest upgrade was initiated in mid-1986, when companies were invited to bid for the project which stipulated that passenger numbers must increase from 560 to 1,400 per hour one way. The Peak Tram also demanded modern state-of-the-art equipment that was safe and easy to maintain. On May 18, 1988, the project was awarded to Von Roll Transport System of Switzerland.

The new plant and equipment was designed to be located underground, beneath the existing upper terminus platform. A total of 1,650 cubic metres of material was excavated and the surrounding area on Findlay Road was reinforced with 236 micropiles, measuring a combined depth of 2,943 metres.

To allow for the installation of the new equipment, the tram service ceased on June 20, 1989 and resumed on August 5, 1989.