Key cellular functions and developmental processes rely on cascades of GTPases. GTPases of the Rab family provide a molecular ID code to the generation, maintenance and transport of intracellular compartments. Here, we addressed the molecular design principles of endocytosis by focusing on the conversion of early endosomes into late endosomes, which entails replacement of Rab5 by Rab7. We modelled this process as a cascade of functional modules of interacting Rab GTPases. We demonstrate that intermodule interactions share similarities with the toggle switch described for the cell cycle. However, Rab5-to-Rab7 conversion is rather based on a newly characterized 'cut-out switch' analogous to an electrical safety-breaker. Both designs require cooperativity of auto-activation loops when coupled to a large pool of cytoplasmic proteins. Live cell imaging and endosome tracking provide experimental support to the cut-out switch in cargo progression and conversion of endosome identity along the degradative pathway. We propose that, by reconciling module performance with progression of activity, the cut-out switch design could underlie the integration of modules in regulatory cascades from a broad range of biological processes.