The company was not managed by itself, but operated under contract by the Swiss Northeastern Railway (Schweizerische Nordostbahn; NOB).

When an initiative committee applied for a concession for a Pfäffikon–Arth-Goldau line, the ZGB sold it the land surveys that it had already carried out.

Finally, on 12 August 1889, the Initiative Committee for Railway Construction from Biberbrugg to Arth-Goldau signed a merger agreement with the ZGB, the WE and an initiative committee for a line from Pfäffikon to Samstagern, so that on 1 January 1890 the two lines became the possession of the newly created Schweizerischen Südostbahn (SOB), which also took over the company.

The company opted for the 15 000 V 16 ⅔ Hz SBB system and immediately started construction of the overhead lines and traction equipment.

Because the eight CFZe 4/4 and BCFZe 4/4 railcars that had been ordered had not yet been delivered, the SOB had to rely on electric traction supplied by the SBB and the Bodensee–Toggenburg railway (Bodensee-Toggenburg-Bahn; BT).

The SOB provided traction units, locomotive drivers and the buffet car for the working day commuter trains on the Einsiedeln–Wädenswil–Zürich Altstetten route (the Gipfeli-Express).