Tom Waits wrote this and was the first to record it. He released it on his 1985 album Rain Dogs, which is one of his most popular and critically acclaimed sets. This song, however, was often derided as one of his more conciliatory efforts. The British music magazine Sounds called it a "conformist AOR song."
Waits, however, has never set out to write a hit song. With a little polish and a nod to the trends of the day, he could have been more commercially viable, but that's not what he was after. Waits stayed out of the spotlight and gave only sporadic interviews. He rarely talks specifics when it comes to songs, but he summed up this one when he said, "Everybody's on their own road, and I don't know where it’s going."
Stewart's manager had him record this as a last-minute addition to Storyteller, a greatest hits album of Stewart's work from 1964-1990. It ended up being a big hit.
Stewart told The Guardian, April 19, 2013, that when he hears the right song, he looks for the way to make it a Rod Stewart song. "For instance," he explained, "I'm sure Tom Waits wouldn't mind me saying this - Tom's 'Downtown Train,' I realized there was a melody there in the chorus, and it's beautiful, but he barely gets up and barely gets down to the lower notes, so I took it to the extreme. That was a case where I brought the chorus alive and there have been a couple like that."
Stewart wasn't the first to hear the potential in this song and take it into the Hot 100. Patty Smyth, best known as lead singer of the band Scandal, released her cover in 1987 which went to #95.
Waits has never had a Hot 100 hit as an artist, and this is his only song to crack the tally as a songwriter. In 2008, his song "Falling Down" made #121 when it was recorded by Scarlett Johansson. Other popular covers of Waits' songs include "Tom Traubert's Blues" by Rod Stewart, "Jersey Girl" by Bruce Springsteen, and "Ol' 55" by the Eagles.