This has effects beyond the two-wheeled rider; Remember, you're never stuck in traffic, you are traffic. A recent study suggested that if 10% of car drivers switched to two-wheeled vehicles, congestion would reduce by 40%[1]. Currently, riders of motorcycles are at an exceptionally high risk of death or serious injury. A fully enclosed two-wheeler could be every bit as safe as a car.
There are also substantial efficiency savings to be made, due to the C1's very small frontal area. A faired two-wheeler with a recumbent seating position is naturally very close to the aerodynamically ideal dolphin-shape. A four-wheeled vehicle could only achieve similar aerodynamic efficiency by being very long and low, with single or tandem seating, as in the Volkswagen 1L concept[2] or Shell Eco-Marathon competitors. This substantially compromises visibility and turning circle, making such a vehicle very poorly suited to its obvious use as an urban commuter.
[1] http://www.acem.eu/publiq/PTW_Belgium_Study_FEBIAC_ENG.PDF [2] http://en.wikipedia.org/wiki/Volkswagen_1-litre_car
A fully enclosed two-wheeler could be every bit as safe as a car.
That's primarily due to their width, not their wheel count. This vehicle is a two-seater, so in terms of congestion it probably has a lot more in common with city cars than with motorcycles.