The treads on my road bike's 28C tires are almost completely gone—they only persist along the shoulders of the tire. Do the treads matter? What is a good indicator of when the tire as a whole needs to be replaced?
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The tread on a road bike's tires is really quite unimportant and purely cosmetic. Road bike tires have tread patterns because they sell better, not because they perform better.
Here's some questions to ask to decide about replacing a tire:
Smooth tread is actually ideal for road conditions, but not commonly found on tires. If you're on hard surfaces such as pavement/asphalt, the tread doesn't help you and actually slightly reduces contact area and increases rolling resistance. On most road tires the minimal tread pattern is just cosmetic to make their customers feel better (since a smooth tire looks slippery).
If you plan to ride through mud, sand or other soft surfaces, you need tread. So when you no longer have tread on your mountain bike or cyclocross bike's tires, it's time to replace them (unless you plan to only use them on the road).
Many road tyres would have wear indicator. Usually that would be a small hollow on the thread. As long as it is visible the tyre is ok, once it is gone tyre should be replaced as that indicates that the main rubber layer is worn out, the grip is no longer that good and it may not be safe to ride.
For the last two worn-out road tires I replaced, I've noticed a pattern in wear that seems to be fairly consistent. This isn't a large sample size, but the tires were from different brands, and the wear seemed consistent with various comments I've seen from others. Based on your own tradeoff between cost- and safety-consciousness, you have to decide at which stage in the wear process you need to replace the tire.
This process might not be exactly the same for all tire models, but I've noticed it in several of them. Of course, even a new tire should be replaced if it develops any signs of trauma as discussed in other answers (bulges, cracks, or gashes), or if the frequency of punctures increases.
I replace my tyres when i start to get a lot of punctures.
With new tyres, i rarely get punctures, despite what i see that i cycle over. after some time, and wear, i suddenly start getting a lot of punctures.
As a hypothetical that doesnt happen: If i dont get any punctures and i start to see the tyre fibers coming through, its definiely time to replace the tyre.
I know it meets no manufacturers or performance guidelines, but its a method that requires absolutely no monitoring and lets me get all the life i can out of the tyre.