In recent years, an exponential increase has been witnessed in the population of the urban area worldwide, causing a significant increase in the use of transportation services. The traditional transportation system in metropolitan cities is overwhelmed, leading to many challenges. The Internet-of-Things- (IoT-) based technology has the potential to optimize transportation services in several ways. This paper highlights the challenges and consequences of an existing transportation system in Peshawar, Pakistan, in response to the rapid growth in population. Apart from the common issues, some areas in Peshawar are highly vulnerable to massive traffic jams. For this purpose, we have proposed an IoT-based framework for busy traffic junctions. The proposed framework considers the route selection problem as a game of two players, where Nash Equilibrium (NE) sets traffic for each route so that no individual can improve its performance by changing its strategy. NE calculates the traffic density from a roadside unit (RSU) collected data, which later detects and avoids traffic congestion by an alternate route selection. The framework in this paper provides a platform for the academia and transport department to convert the existing transportation system to IoT-based intelligent transportation in Peshawar, Pakistan.