Let's take this idea a little farther, shall we? Imagine if the pallet were more durable, perhaps made of steel. Let's say the pallet was loaded with freight or had seats on it. Now let's assume the pallet can be hooked to other pallets to form a long string of pallets as if it were a rail car. Keep in mind the pallet can still be moved via a fork lift.
Now pull the string of pallets around town with a small, purpose built, energy efficient locomotive(s). Preferably a locomotive in front and the rear. Passengers and freight can get on and off anywhere along its route.
If an entire pallet is being shipped to a customer that customer could remove the entire pallet from the "train" unload it and replace it the next time the Pallet Train stops.
Pallet Train stations could be placed about town for passengers and parcels then leased to shipping companies and what has traditionally been bus and trolly companies.
The end result would be far fewer trucks and cars in crowded downtown areas with more efficient delivery of goods. The city that does this first will see a vast improvement in its local economy.
And here's a little secret you might not know. It can be just as easily done without the tracks. Too bad Downtown Greensboro, North Carolina will never figure it out.