As urban transport in today's environment, I cannot see horses replacing motor vehicles. However, if the urban environment changes, perhaps it could be of use. I think the first thing that would need to change is the use of the motor vehicle. Gas is expensive, but we are still using our cars and other vehicles. If it is cheap enough for us to drive our cars and trucks, then it is cheap enough to use motor vehicles as transports in commerce. When and if the costs of driving cars and trucks becomes prohibitive, then horse drawn transport might be an alternative for local commerce. I don't horses would be used for long distance transport. All that said, I think battery technology will be such that the use vehicles powered by only electric motors will be practicable, and horses will not be used.

I think horses might be used as transport in more rural situations, where the by-products can be put to use as fertilizer, is more practical.