Naturally, people will stop walking or cycling. This is seen a lot in America. It is nearly impossible to survive in American cities without a car. Whatever chores you have in your day-to-day life, Buying groceries, going to restaurants, or to gyms, or movie theatres, you need a car for everything.
Compare this to European developed countries, Japan, or South Korea, where the public transportation system is properly developed. And urbanization happened in a way that people carry out these day-to-day tasks by walking or cycling.
Naturally, in those countries, people would be healthier, and the obesity rates lower. There are many lessons to be learnt.
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