The urban population is rapidly growing, with projections indicating that 70% of the global population will reside in urban areas by 2050. This trend has led to suburban expansion, characterized by low-density, automobile-dependent development patterns. In cities like Baku, Azerbaijan, car dependence poses significant challenges to sustainable urban development. Despite efforts to promote public transport, the city remains highly reliant on cars, leading to issues such as traffic congestion, environmental pollution, and social inequality. This paper analyses the problems associated with car dependence in Baku and proposes a policy mix to address them, focusing on formalizing and incentivizing carpooling schemes. The proposed policies aim to decrease air pollution, enhance passenger safety, and reduce urban car dependence by promoting multi-modal transport options and improving suburban linkages. However, successful implementation will require public and private partnerships, involving stakeholders, and the public, as well as careful consideration of technical feasibility and data availability. Ultimately, these policies represent a step towards achieving sustainable urban development in Baku and other cities facing similar challenges.