By Warren Brown
Sunday, March 30, 2008

We often measure change by large events, such as Ford's sale last week of its Jaguar and Land Rover luxury brands to the Tata Group, a wealthy Indian conglomerate.

But such measurements can be misleading.

The sale of Jaguar and Land Rover to Tata is not the seminal event some in the media have portrayed it to be. Instead, examined in its particulars -- Ford's unloading of those brands for $2.3 billion, less than half of what it paid to acquire them in 1989 -- is little more than a desperate correction of a mistake that never should have been made in the first place.

Ford bought Jaguar and Land Rover to regain some of the prestige it had lost by failing to build desirable, high-quality cars wearing Ford, Lincoln and Mercury badges. It was a waste of money, a pursuit as useless as trying to buy friendship. Now, Ford plans to use the money it gets from the Tata deal to do what it should have been doing all along: designing and manufacturing superior quality, must-have, Ford-branded cars and trucks.

It is important to note that development. But it is also important to point out that Ford's deal with Tata, expected to be finalized by the end of the quarter, is not nearly as significant as something else that occurred last week: the merger of Zipcar and Flexcar, the nation's leading urban car-sharing providers.

The Zipcar-Flexcar deal, which could help reduce the number of cars and trucks crowding America's roads while simultaneously boosting the fuel efficiency of the vehicles using them, points to the future of the automobile industry.

The resale of Jaguar and Land Rover is in many ways a continuation of the past, the purchase of prestige stemming from an age when fuel was plentiful and relatively cheap, when luxury meant the exclusion of most things practical, when horsepower ruled.

In short, here's betting that Tata will have more success with its super-cheap, super-efficient Nano city car and that automobile's future derivatives than it will have with keeping fuel-consumptive Jaguars and Land Rovers afloat in an era of $100-per-barrel and higher oil costs.

A Nano-like car, should it ever make it to the Western Hemisphere, would fit in perfectly with Cambridge, Mass.-based Zipcar and D.C.-based Flexcar, now merged singly under the Zipcar banner.

The newly expanded Zipcar will bring car-sharing to 26 of the United States as well as to jurisdictions in Canada and London.

The merged company now has 180,000 international members -- consumers using the service -- who will have access to 5,000 vehicles, many of them representing the best fuel efficiency available, in the Zipcar fleet.

Simple math breaks that down to 36 people per Zipcar.

The cars can be rented on an hourly, daily or longer basis using the company's proprietary Z3D system, an electronically controlled communications platform employing the equivalent of a credit/ID card that automatically links consumer information to corporate monitors.

Zipcar members pay a set fee depending on how long they use a vehicle. The fee includes fuel and insurance costs. Because multiple Zipcar members conceivably could use the same vehicle for different purposes on the same day, the actual impact on urban congestion is the equivalent of 20 vehicles on the road eliminated for every one vehicle shared, Zipcar officials say.

"We're selling convenience to our customers," said Zipcar's chief operating officer, Mark Norman. The merger, he said, represents an "exponential expansion" of that convenience.

At the moment, Zipcar has to digest what it has consumed in the merger. That means the company plans to curb, for a while, any appetite it has for more expansion. But the evidence is that the car-sharing business has explosive growth potential, largely thanks to the ever-rising cost of vehicle ownership.

Currently, according to the American Automobile Association, it costs nearly $700 a month to operate a mid-size family car -- considering insurance, parking, fuel and other costs. Fuel accounts for about 20 percent of that monthly tab and is rising. Those costs make renting a car on an as-needed basis, even for an hour, more attractive to many consumers than car buying.

Globally there are an estimated 34 car-sharing companies, most of them tethered to urban areas, which means they are less likely to have fancy Jaguars or fuel-thirsty Land Rover sport-utility vehicles at the ready. But "less likely" does not mean impossible, or completely unavailable, Norman said.

Selling convenience means that Zipcar will try to meet varying transportation needs and desires, Norman said. That could mean a sport-utility vehicle where one is needed, or a more well-appointed sedan where that is desired. But usually, in the city, where most car sharing is done, it means the cars that can go the longest distance on the least amount of gas.