It should be starting in first gear. It's just the 2.24 rear axle ratio - the tallest rear axle ratio I've ever heard of in a Mercedes. In the city you're just always driving around at 1200 - 1500 rpms where the engine has no real life. Of course it's nice on the highway and good for mileage and reducing engine wear. You could change it - many alternatives available all the way up to 3.27. I think 500Es are 2.82. You could also use the gated shifter - keep it up above 2,000 rpms and it's fine.