(1) Dabao and Bao Xiao go for an outing by bicycle. During driving, Dabao is taken as the reference object, while Bao Xiao is still, because their relative position has not changed.

(2) When a bicycle goes downhill, its mass and speed remain unchanged, so its kinetic energy remains unchanged;

(3) When the bicycle goes downhill, the weight is constant and the height is reduced, so the gravitational potential energy is reduced;

According to the definition of mechanical energy, kinetic energy and potential energy are collectively called mechanical energy. When going downhill, work is done by overcoming friction, so mechanical energy is reduced.