Fred is somebody other cyclists mock due to snobbery and/or envy. The original use is one of grudging respect - there may have been a real Fred who was an experienced utility or touring cyclist who could ride fast and far without spandex or a racing bike. So a racing club cyclist out training for a race dressed like a Tour de France rider would be mortified if some "Fred" on a commuter bike wearing non-racing clothes kept up or passed him.

Of course, many of us here embrace our Fredliness.

More recently the term has also been used to describe people who are seemingly over-equipped but under-skilled - maybe they bought a $5000 racing bike and putter along at 10 km per hour on the sidewalk with their bike set up all wrong, and have no idea other riders ridicule them, perhaps partly due to resentment.