A real life example of free riding, one I've used hypothetically in class to explain why I don't assign group projects. From NYT's The Ethicist (in full--I hope it is ethical for me to do so):
A large portion of our grade for a course I am taking at a major business school is based upon group projects. One person on my team has taken an egregious free ride on the hard work of the rest of us. Most of us have already turned in our final papers, so telling the professor about this would have no practical purpose, but it might teach this guy a lesson. Rat him out? — K.F., OAKLAND, CALIF.
Rat away right away, not to teach the guy a lesson — that’s not your job — but to give your professor an honest account of how the project was accomplished. It is misleading to list this student among those who did the work if he did not. What’s more, your professor can forestall, or at least respond to, such problems only if he or she knows about them.
You should have spoken to your teacher when the problem first emerged. There may have been contingency plans for dealing with a feckless teammate. (Perhaps the plan was to let you go over to the free-rider’s apartment and swipe his stereo as compensation for your hard work.) I consulted a professor in an M.B.A. program who said, “The ground rules for dealing with free riders are also sometimes explicitly laid out — e.g., the free rider may be fired by an appropriate majority/supermajority of group members.” (He did not mention stereo-swiping.)
There is another possibility. Managers must sometimes cope with teams comprising workers and drones, the productive and the parasitic, the quick and the dead. (Deadish.) This assignment may have been conceived in part to teach you as much. That professor I spoke to concurred, saying, “One of the explicit benefits of working in groups is that it forces students to confront these and other management issues.” (Another consideration, according to my B-school expert: “The other major advantage of group projects is that it means less grading for professors.”)
UPDATE: K.F. did not go to the professor, deciding that his shiftless teammate had not harmed anyone enough to warrant it. K.F. received an A+ in the course.