That still doesn't solve last mile supply of stores and offices, nor does it solve construction, policing, emergency services, etc.

Each of those likely has possible alternatives to motorized transport, but they're all different alternatives. Meanwhile, today, they all share the same road network with regular civilian commute, sharing costs and mutually improving efficiency.

Put differently: instead of imagining all passenger cars replaced by bikes, imagine all roads replaced by bike lanes, then extrapolate from that.