Urban areas encounter increasing transportation difficulties as they experience higher population density, eliciting a necessity for creative resolutions to bolster sustainability and effectiveness. This paper explores the integration of DLT oracles into urban mobility systems, demonstrating how they can transform urban transportation by leveraging real-time data for route optimization, traffic management, and the incentivization of sustainable transportation behaviors. Oracles act as critical intermediaries, fetching, verifying, and relaying accurate and timely external data to blockchain networks, thus enabling smart contracts to make data-driven decisions. The potential of such technology to improve urban life is immense, however, its execution is not free from challenges, like the worries around scalability, data security, and the importance of effective multi-stakeholder partnership. Through theoretical analysis and proposed frameworks, this study not only illustrates the operational benefits of oracles but also addresses the technical and governance challenges inherent in their integration into urban mobility. Additionally, the study introduces a token-based rewards system utilizing real-time urban data streams such as traffic intensity and public transport usage to dynamically allocate rewards, promoting less polluted and congested routes through a detailed mathematical model. The findings highlight the transformative potential of oracles and a variable rewards model to make urban transportation systems more responsive and sustainable, paving the way for future research and practical implementations in smart city initiatives.