The exponential growth of urban populations presents pressing challenges for public transportation systems worldwide. Among the myriad issues, traditional public transportation systems face a multitude of challenges, from inefficiency to safety concerns. The centralized nature of these systems exacerbates these issues, leaving commuters frustrated and cities gridlocked. However, Blockchain and Smart Contracts present an alternative paradigm, one that promises to disrupt the status quo and usher in a new era of urban mobility. In this comprehensive study, we conduct a systematic literature review to explore the transformative potential of Blockchain in the public transportation sector. By analyzing both its advantages and challenges, we pave the way for future research on this topic.