I was in that mans position at one point, and I can tell you from experience, that if you go about it the wrong way, you'll lose him as a friend as well, and thats obviously not what you want.
Most inadequate bass players, who aren't in-sync tend to forget what the bass guitars job is, it's not a "lead" instrument its an accompaniment instrument, and the most vital part of the rhythm section..He needs to learn to ride the kick drum, if he can do that he can play bass. So few can tell when a band has a great bass player vs. having an average bass player, that really if the rest of the band is solid, then he can be average and no one at your shows will notice.
That said, pull him aside, and make a point to clarify this is not his fault, he's trying to step his game up by playing with more experienced musicians, I too was flying by the seat of my pants with one of my first bands, and the guy ripped me apart, and never gave me the chance to shore up my bass lines, he more or less told me after a practice that he didn't need me, and I was holding them back. I never fully forgave them for that because he kept reiterating my faults instead of telling which direction I needed to go to get better. By the time he did get to mentioning my problems musically, I was already so angry I didn't listen to any of it, I packed my gear and left.
Truth is, afterwards when I had a chance to cool down, I thought about what he had said, and I actually went about focusing entirely on his suggestions and things I could change, and he was right. Once I tried what he suggested it brought my timing into much better focus.
My biggest problem was my fingers couldn't hold a steady rhythm. He always suggested me using a pick, and I would never disgrace my bass, by cheating with a pick, but he was right, I was able to hold a much tighter and cleaner bass line using a pick, I used it for a while, then one day decided to try again without a pick and lo and behold, my natural sense of timing had gotten stronger, and I could now play without a pick. The attack of a pick is much faster, and allows for your brain to increase it's overall speed, because the pick can play at the speed your brain is telling it to, whereas the fingers tend to lag behind alittle
Try helping him to fix his issues first, give him a good month to get it, if he doesn't then sit him down and explain that you have to look elsewhere until he has his chops down, and that later on you guys can always pick back up and try again.
