Smart transportation is a dynamic and comprehensive approach aimed at addressing the transportation challenges faced by modern societies. This approach integrates cutting-edge ICTs to enhance transportation efficiency, promote sustainability, and improve urban living. However, for this innovative approach to be successfully implemented, the challenges encountered need to be identified, and prioritized, and effective solutions devised. This study provides a framework for understanding and addressing the primary challenges in smart transportation. These challenges include data security and privacy, reduction of environmental impacts, infrastructure deficiencies, integration challenges, societal acceptance and security concerns, costs, technological transformation, and legal regulations. To effectively address these challenges, this study employs the G-DEMATEL approach. This approach combines grey theory and DEMATEL methods to determine the importance levels of the challenges. The integration of these methods helps identify priority areas to be considered in the planning and implementation of smart transportation projects. The findings obtained serve as a strategic guide to enhance the success of smart transportation projects. Factors such as increasing societal acceptance, improving infrastructure, reducing costs, managing technological transformation, and minimizing environmental impacts are critical for the sustainability and effectiveness of these projects. Therefore, a multi-stakeholder approach should be adopted, and these factors should be addressed in a balanced manner. In conclusion, this study provides a comprehensive resource that appeals to a broad audience, ranging from academic researchers to policymakers and industry leaders. By offering a robust framework for understanding and addressing the challenges faced by smart transportation, this study contributes to the development of more effective and sustainable transportation strategies in the industry.