The lead vehicle has to drive through, and push out of the way, relatively stationary air. As it pushes the air out of the way, the air left behind in the wake reduces air pressure behind the vehicle (the wind resistance up front causes an increase in air pressure forward, and reduced air pressure rearward), but the rearward wake (or slipstream) is being dragged along and is moving forward quite a bit faster than the surrounding ambient (relatively stationary) air.
If an object is inside the slipstream behind another object, moving at the same speed, the rear object will require less power to maintain its speed than if it were moving independently, thus increased MPG. In addition, the leading object will be able to move faster (or with less power at the same speed) than it could independently because the rear object reduces the effect (drag) of the low-pressure region on the leading object. The rear object will have increased air pressure directly in front of it, both diminishing the low pressure drag of the lead vehicle, and pushing this high pressure air into the back of the lead vehicle, in effect giving it a little "push" from behind. Both vehicles with have reduced drag, making it possible for both vehicles to travel faster, or more fuel efficiently, than either vehicle could independently. With multiple vehicles the effect is even more pronounced.
The most dramatic example I know of is not racing cars or bicycling, but when a flat bed with the aircraft equipment on the truck is just riding on the aѕѕ end of a car (like less than 5 feet) who is doing a 60 in a 55 zone going through Chicago on I94 in a Construction Zone with the cruise control on.