Smart cities and the future of fleet management
The concept of the ‘smart city’ has been around for decades.
In the early days, it simply meant a city using new technology to improve its services. But times have changed and so has the meaning.
Today, there’s still no single definition of what makes a city ‘smart.’ The term is constantly evolving, much like the cities it describes.
The European Commission describes it this way:
“A smart city goes beyond the use of digital technologies for better resource use and less emissions. It means smarter urban transport networks, upgraded water supply and waste disposal facilities and more efficient ways to light and heat buildings. It also means a more interactive and responsive city administration, safer public spaces and meeting the needs of an ageing population.”
In other words, a smart city isn’t just about gadgets and data – it’s about using innovation to solve real-world problems and improve everyday life.
So, what technologies are helping cities become more intuitive and efficient? And what does it mean for fleets?
Here, we delve into the world of smart cities and how they’re reshaping the landscape to create both new opportunities and fresh challenges for fleet operators.
Smarter routing
Traffic can have a huge impact on fleet operations. Delays on the road don’t just affect arrival times -they can reduce the number of jobs completed each day, impact customer service levels and increase fuel consumption. The result? Bigger operational costs and a hit to the bottom line.
Technology across smart cities is helping fleet operators better optimise their routes.
Sensors around the city along with data from vehicles mean real-time information can be gathered on congestion and road closures. This can then integrate with fleet management systems or advanced telematics systems to allow fleet managers to make more informed decisions, and fleet drivers to get from A to B more efficiently.
Artificial intelligence is now taking this a step further.
In some cities, AI-powered traffic management systems are being used to optimise traffic light timings based on both real-time and predicted traffic conditions, helping to ease congestion during peak hours and large-scale events. These systems simulate and test different signal strategies, adjusting flow dynamically to improve journey times and reduce delays.
An example of this is in Hull, UK, where an AI traffic trial delivered impressive results – cutting morning peak journey times by nearly 17% and evening peak times by 8%. This saved around 90 hours of congestion in just one week.
Predictive analytics is also playing a key role in enhancing route planning. By analysing historical traffic patterns, weather forecasts and scheduled events, smart routing systems can anticipate congestion before it happens, allowing operators to proactively reroute vehicles and avoid delays completely.
Eco-routing is gaining momentum too, with routing tools now factoring in fuel efficiency and environmental impact to help fleets reduce emissions as well as travel time.
In some areas, integration with smart parking systems means drivers can be guided straight to available spaces, cutting down the time spent searching for parking and further improving route efficiency.
Making the switch to electric easier
As ICE vehicle bans draw closer and company sustainability targets become more ambitious, electric vehicles are becoming an increasingly attractive option for fleets.
Smart cities are playing a crucial role in accelerating the shift. This is because they don’t just encourage electrification – they enable it.
As with other urban areas, smart cities are rapidly expanding public EV charging networks. But what sets these cities apart is how they manage and optimise their charging infrastructure.
Smart charging stations can dynamically adjust pricing based on energy demand, encouraging off-peak charging. This helps fleets lower energy costs while easing pressure on the grid. Stations can even communicate with EVs to establish the most efficient charging schedule.
Newer smart chargers go even further, offering real-time charger availability, mobile booking and live charge-level updates through integrated apps. Fleet drivers are able to reserve a charger remotely, receive alerts when it’s available and even track charging progress, all from their phone.
When integrated with fleet management software, this data becomes even more powerful. Charge session information can feed directly into telematics platforms to support route planning, energy cost analysis and vehicle availability tracking. Predictive analytics can identify optimal charging locations based on usage trends, recommend the best time to charge and ensure vehicles are always ready when needed.
Some cities are also deploying Vehicle-to-Grid (V2G) technology, which enables fleet vehicles to return unused energy to the grid during peak periods – helping to stabilise supply while generating additional value from idle vehicles.
Enhanced last mile delivery
Smart cities are transforming the way goods move through urban environments, particularly when it comes to the last mile.
Many urban areas across the globe are becoming more pedestrianised or introducing low-emission zones, meaning more traffic restrictions, access limitations and the possibility of additional costs for fleets.
In smart cities, urban logistics is being reimagined to support cleaner, more efficient transport systems. One key approach is the use of micro-hubs and urban consolidation centres (UCCs) – logistics sites positioned on the edge of the city where goods are transferred onto smaller, low-emission vehicles for the final leg of delivery.
Smart cities are also embracing electric cargo bikes and other micromobility solutions, offering fleets a more agile, low-emission option for navigating restricted zones where traditional delivery vans may face access limitations or congestion-related delays.
Another major development is the rise of smart kerbside management systems, seen in places like New York or London.
Using sensors, CCTV and real-time data, these systems can detect vehicle type, monitor dwell time and communicate kerb availability to drivers through in-vehicle tech. This allows them to spend less time searching for legal loading bays, cut fuel costs from reduced idling and prevent double parking.
Not so straightforward
Smart cities promise major efficiencies for fleets, but it also comes with challenges.
Cost remains one of the biggest hurdles. Embracing smart technology, whether that’s upgrading vehicles, installing new platform or rolling out connected infrastructure, requires significant upfront investment – and it’s not just the hardware.
Behind the scenes, fleets must also account for IT upgrades, software integration and long-term support.
System integration itself can be a major roadblock. To operate effectively in a smart city, fleets rely on an expanding mix of technologies. But when these technologies come from different providers and run on separate platforms, pulling them into a single, real-time view becomes a complex and resource-heavy task. Without interoperability, data remains siloed, making it harder to gain visibility, respond quickly and make informed decisions.
Data security is another growing concern. As fleets share more real-time data with city systems, safeguarding sensitive information becomes critical. Cybersecurity threats, compliance with regional privacy laws and the risk of breaches demand constant attention and investment.
On top of that, there’s regulation complexities. Emissions rules, access restrictions, data sharing requirements and infrastructure regulations can vary from one city to the next, creating a compliance maze for fleets that operate across multiple cities and countries. What works in one location may require costly adjustments in another.
Finally, there’s the human element to consider. As technology continues to shape daily operations, drivers and logistics teams need to be upskilled to use new systems confidently and effectively. Without the right training and change management support, even the best tools can fall short.
The cities of the future
The shift towards smarter, more connected cities is already underway, creating real opportunities for fleets to become faster, cleaner and more agile in how they operate.
The fleets that can adapt with confidence, invest strategically and stay ahead of the curve will be best positioned to thrive in the cities of tomorrow.