Generally, every city has big transportation hubs - airports, train stations and so on - located at strategic places within the city. Musk's idea is to ditch these hubs and replace them with more frequent and much smaller stations which get you closer to your destination. On the other side if they don't have to move millions of people to the same hub but rather move a much smaller number of people, they can afford to dig smaller tunnels and stations which are way more easy and fast to build.
For instance, in London every time they build a new transportation hub, it takes years. These stations are massive, they literally dig in every direction for several meters.
I don't know if it's going to work but surely there's thinking behind it.
Edit: typo