A bit of both I think. Having lived in The Netherlands for 35 years, I'd say that the overwhelming majority of trips are under half an hour, ranging from a quick trip to the shops to a commute. However, most people wouldn't think twice about taking their bike for going somewhere that'll take half an hour to get to. Couple that with the fact that most inner city street plans date back to the middle ages (narrow roads, one-way streets, and more recently pedestrianised areas), and that, as a result, cycling is often not noticeably slower than driving in inner city areas, and I'd say that cycling is a much a substitute for walking as it is for driving or public transport.