I'm an out and out, unrepentant dog lover - but you're right to be upset, and they're wrong to treat the animal the way they do. (As in leaving it unrestrained and untrained.) In my view, by not training their dog to interact appropriately with other humans in a human world, they're doing "animal cruelty" themselves.
What you're seeing is a territorial dominance behavior, and it is potentially dangerous. Each time someone rides through the area, to the dog it looks as if it has successfully threatened and chased off a challenger. Since this dog has not learned to defer to humans, if challenged too much it could become violent.
At the minimum I'd call animal control each time it happens. Make a cell phone video when possible, again each time. If the video is dramatic enough, and if you "play" the report right (Gosh, officer, I love a dog as much as anyone, but this guy is really scary. I'd hate to think what might happen to some poor old lady who can't walk fast enough to be safe...), the problem should be solved promptly.
A hundred years ago, they actually sold "bicycle guns" which were sub- Saturday night special pistols for dealing with dogs like this. Now, you would be hung out to dry unless you could show you had severe bodily harm.
