The inner diameter is less than the outer diameter which makes for a small overdrive gearing ratio, translating to fewer steps even under normal operation.
For space efficiency, yes. Bikes are actually better than walking for CO2 output. Your food has a CO2 cost, and bikes are really damn efficient at turning your food calories into forward momentum. Ebikes are even better on a per mile basis, but their higher manufacturing cost mean they never catch up to lifetime CO2 output of a regular bike. Still, whatever gets more people on bikes is a win in my book, ebike or otherwise.