We investigate the opportunities and challenges of the forth wave of digitalization, also referred to as the Internet of Things (IoT), with respect to public transport and how it can support sustainable development of society. Environmental, economical, and social perspectives are considered through analysis of the existing literature and explorative studies. We conclude that there are great opportunities for both transport operators and planners, as well as for the travelers. We describe and analyze a number of concrete opportunities for each of these actors. However, in order to realize these opportunities, there are also a number of challenges that needs to be addressed. There are both technical challenges, such as data collection issues, interoperability, scalability and information security, and non-technical challenges such as business models, usability, privacy issues, and deployment.