A calorie is a unit of energy—it’s used to measure how much energy is contained in the foods you consume, and how much energy your body outputs in the form of physical work. These are objective measurements that have nothing to do with your body’s internal biology—you could measure the energy input and output of a robot or a car the same way. (In particular, calories in and out don’t tell you exactly how much weight you’ll gain or lose in the process—that’s dependent on your metabolism.)

The calories spent to work an exercise bike can be measured in terms of how much energy is needed to turn the pedals—it’s independent of whatever’s doing the turning.

It doesn't need to be perfect, just reasonably close.

If you're trying to track calories down to even double digits you're going to have a ton of error on both the input and output.

Beyond what other people are saying, it should be pretty reliable for comparing between exercise sessions so you can see your improvement over time.

It's a good guess. Maybe accurate enough for the average user. For an exact number you'd probably need to put on a mask attached to some machinery and breathe through that, to measure how much oxygen you take in and the CO2 you exhale in return... to get an exact measurement. Everything else is an approximation.

I would caution against using these numbers for any Calorie-in/out calculations. Even if they were 100% accurate, it still doesn't take into account anything that happens outside of that machine.

Example: There's something we call "non-exercise activity thermogenesis" (NEAT). This includes lots of things you do without thinking about it, like fidgeting, tapping your feet while sitting, or pacing around the room. In some people, NEAT can decrease significantly after exercise, which then negates much of the Calories burned.

On a theoretical level, food calories represent a specific amount of energy that can be extracted from food. So some kind of calculation could probably be made as to how much work is required to operate the exercise bike, which probably depends on your height and weight. That work uses a certain amount of energy, which is probably equated into calories.

All that said, I have no idea how accurate that would be. And in the end IIRC there's a bunch of other factors that affect how humans burn calories and gain or lose weight, so in the end the calorie burning stats only really need to be comparable to other calorie burning stats. So I think the bigger question is: Do different exercise equipment types put out comparable numbers?