Diners started out on wheels. In the late 19th century, street carts selling snacks and lunches had morphed into roving lunch wagons. While some lunch wagons sported Gilded-Age decor, such as elaborate coffee urns and etched windows, many were ramshackle, giving them an iffy reputation.
The person credited for creating the polished diner image was a lunch wagon manufacturer named Patrick Tierney, whose prefabricated and eventually stationary eateries featured tiled floors and a revolutionary indoor restroom. Meanwhile, on the rails, dining cars were setting the standard for food service on the move. Tiny lunch wagons couldn’t accommodate the demand for fast, tasty meals, so manufacturers began building shippable, train-like “dining cars,” which people had shortened to “diners” by the mid-1920s.
See: “Why So Many Diners Look Like Train Cars” by Anne Ewbank on the Atlas Obscura website (2018)