That is the clutch cable. It should be somewhat hard to pull but you may need to oil the cable. Use some light weight oil or squirt some WD40 down inside the cable sheath up near the handle and also down by the tranny.
Check your 2 speed for transmission fluid. Use ATF Type "F". DON'T overfill it. It should only take 9.5 ounces. It is a common mistake to overfill these 2 speeds because the filler plug is on top of the tranny, but don't top it off.
When the tranny is overfilled, the moped will either not go or will go very slowy.