
He's jumping because he's exited, he obviously knows what 'down' means, but it has to be more rewarding to him than jumping up, for him to choose that option.
When he does 'down' on command, do you give him heaps of fuss & praise? This really needs doing, done right & consistently (and given time to learn some self-controll with maturity), he should, in time choose 'down' when he sees somebody without you needing to tell him.
Also, you need to work at a level when he isn't too exited, so you need to practice passing people at a greater distance, get him to a reliable 'down' then gradually decrease the distance you pass people.