dictionary.com says that smug is contentedly confident of one's ability, superiority, or correctness; complacent.
I think the emphasis can be safely placed on "superiority." When I think of "smug" I tend to think of money, like a person who made a fortune with the dot.com bubble and invested sensibly and now has several fabulous expensive houses. "Smug" means "I have it and you do not, in fact, what I have you will never have."
Smug is also about possessions more than attributes. We don't describe a brilliant athlete as "smug" because we know they acquired their strength and grace because of a lot of hard work. Smug translates to taking credit for something that is more about what you own than what you are.
A smug bicyclist might be one who owns a fabulously expensive bicycle that another person cannot afford. A smug bicyclist might own a fabulously trendy ride that they feel makes them superior to the next bicyclist. But here's the thing: once the person is on the bicycle, it all evens out. The race is won just by riding and bicycling is a club anyone can join.
So last night we had a 7 year old friend (who I will call Don't-Bug-Me for the slogan on her tee-shirt) stay over and we wanted to bring her in to school with Rapunzel this morning. We always bike Rapunzel in and she usually rides in a wagon and reads a book on the short trip. The wagon only fits one kid. We have often carried Sparkle Pony on the back of the Contraption Captain's bicycle. He's made covers to protect feet from the wheels and we put a pillow on the rack so that it's comfortable. After clearing the matter with Don't-Bug-Me's mother and getting buy-in from Don-'t-Bug-Me herself, the four of us rode to school in style, under our own power.
It felt awesome. We were all so happy! Not smug though. Smug would be if this club were exclusive, but it is not. Anyone can join this club and have the same fantastic time. You need a bicycle. That's it. You're in.
...here they are by the way. I've artfully blurred their faces to preserve anonymity but they were both smiling. Really.