He's right. Spot reduction is a myth. The only way to make the upper body have less fat is to lose more fat through the normal methods: calorie reduction and exercise.
That being said: don't do that. If you have no muscular development in your upper body, then skinny looks worse than flabby. You SHOULD start doing resistance training for your upper body. The more muscle you put on, the more body fat you can hold and still look "cut." In other words, your current level of bodyfat may well look "ripped" if you just beef up your upper body a bit.
Hit the weights for the upper body. Its the only way to achieve balance, given that you work your lower body constantly on the bike.