I started cycling on my hybrid in ordinary shorts/teeshirts and gradually went to baggy shorts with clip-in padded liner shorts and a cheapo lycra base layer and jersey. It's only now I have a road bike I've gone to less baggy, better quality lycra, but I still wear the baggies to commute into town. And hubby cycled for a long time on a hybrid, wearing full lycra and no one batted an eyelid.