Urbanization Drives Public Transportation Market Growth Through 2034
New York, Thursday, 23 October 2025.
The public transportation market is projected to expand significantly from 2025 to 2034, fueled by urbanization and infrastructure investments, with notable growth in the Asia Pacific region.
Driving Factors Behind Market Expansion
A recent forecast indicates that the public transportation market is set to grow at a compound annual growth rate (CAGR) of 7.8% from 2025 to 2034, reaching a projected market size of USD 467.13 billion by 2034. This growth is largely attributed to rapid urbanization and significant investments in infrastructure, particularly within the Asia Pacific region. As urban populations swell, the demand for more efficient and effective public transportation systems is becoming increasingly critical [1].
Infrastructure Investments and Technological Advancements
Governments worldwide are responding to the pressures of urbanization by channeling investments into public transportation infrastructure. In 2024, the U.S. Department of Transportation Federal Transit Administration allocated USD 20.5 billion to support various transit projects across the country [1]. Similarly, smart transportation initiatives, such as the Majhi Bus initiative in Goa, India, have been implemented to modernize public transit systems [1]. These efforts are complemented by technological advancements, including automated fare collection and AI-powered route optimization, which enhance operational efficiency and passenger experience [1].
Impact of Global Policies on Public Transport
The global push towards zero-emissions mobility solutions is also a driving force in the public transportation market. Over 30 countries have committed to hydrogen roadmaps, planning investments exceeding USD 570 billion to develop hydrogen fuel cell technologies. These initiatives align with broader efforts to decarbonize transit systems and promote sustainable urban mobility [1]. Additionally, key players in the sector, such as East Japan Railway Company and Mass Transit Railway, are investing heavily in digital transformation to stay competitive [1].
Regional Insights and Future Projections
The Asia Pacific region is anticipated to lead the market expansion with a projected CAGR of 8.7% over the forecast period. Within this region, India is expected to grow at a remarkable rate of 8.9% CAGR, driven by government-led infrastructure projects and urbanization efforts. The rail segment, in particular, is set to experience notable growth, with a projected CAGR of 8.9% [1]. As more people migrate to urban areas, the need for efficient transportation systems will continue to rise, shaping the future landscape of public transportation on a global scale [1].