Picture, if you will, a medium sized medieval town that is propped up by pretty much a single industry: the majority of working people in the town work on a river boat, transporting goods, materials, crops and travelers down the river to the Capital city that lies close to the river estuary.
One day Rich Businessman gets tired of paying the overheads to have the materials for his business shipped to him. He decides to put to get together a consortium to build a private road (or canal, depending on which is better value for money), so that there is a more direct route (the river is quite circuitous) from where their materials are produced to the city where they need to be. Anyone else can use the road... for a small fee.
Now that there is a quicker, safer and cheaper route to the Capital for anyone and everyone who needs to get there, trade via the river disappears almost overnight. The town suddenly has no sustainable income, however there is now much work to be had on the New Road/Canal.
What would happen to the town in the short-term and the long-term? Would it be abandoned? Would they adapt?
Edit: I should specify - this town is not a hub for the New Road/Canal. It is accessible from the town, but the majority of people using the new transport method do not come through the now obsolete town. They would travel there directly from wherever they have mined/ farmed their materials.