Light travels faster in space than fiber. SpaceX's satellites (unlike existing constellations) are low enough that that benefit makes up for the small of extra distance.
In contrast, the offering that SpaceX has just gotten approval for would use satellites that are about 342 mi above, and the network of satellites would be used to route the connection to a hop close to the destination.
The result of the above is latencies that are actually lower than even a direct fiber connection if the haul is long enough, because connections across Starlink would be at the speed of light (minus the amount of time it takes to process packets at each hop), and the speed at which data is transferred over fiber is some fraction of the speed of light.
Since they're flying so low, they'll need thousands of satellites to provide wide coverage (instead of one super high satellite that can see half the earth at the same time), but they should be quite high performing.
[1] https://www.google.ch/amp/s/www.nextbigfuture.com/2018/11/sp...