We need both gateways with large coverage areas, to give full city-wide coverage, as well as gateways only covering a street. As soon as we get many nodes transmitting on LoRaWAN frequencies, collisions will be common for gateways with large coverage areas. But the gateways with small coverage areas will still be able to receive packets successfully. This is the same idea as with cellular networks with a limited number of customers per cell. You spread subscribers over many small cells, while you still have a big cell for full wide area coverage.
We were actually testing collisions on LoRaWAN today. Clearly LoRaWAN does not do any listen-before-talk or CSMA to avoid collisions. Therefore a pure ALOHA system. The chance for a collision is however low. This is due to the 1% duty cycle restriction, in conjunction to distributing the transmissions across 3 channels. An interesting observation is that two packets of different spreading factors, on the same channel at the same time seems to be received successfully by our Multitech gateway.