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Smart mobility and transportation, in general, are significant elements of smart cities, which account for more than 25% of the total energy consumption related to smart cities. Smart transportation has seven essential sections: leisure, private, public, business, freight, product distribution, and special transport. From the management point of view, transportation can be classified as passive or non-cooperating, semi-active or simple cooperating, active or cooperating, contract-based, and priority transportation. This approach can be applied to public transport and even to passengers of public transport. The transportation system can be widely observed, analyzed, and managed using an extensive distribution network of sensors and actuators integrated into an Internet of Things (IoT) system. The paper briefly discusses the benefits that the IoT can offer for smart city transportation management. It deals with the use of a hierarchical approach to total transportation management, namely, defines the concept, methodology, and required sub-model developments, which describes the total system optimization problems; gives the possible system and methodology of the total transportation management; and demonstrates the required sub-model developments by examples of car-following models, formation motion, obstacle avoidances, and the total management system implementation. It also introduces a preliminary evaluation of the proposed concept relative to the existing systems.