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Definitely jealousy on the part of the needler, and a surprising amount of insecurity showing in the LW. I would recommend looking into verbal self-defense; there's practically a whole genre around that sort of thing, and a little research can give you suggestions that are both more in-depth and more specific than what Cary could offer here.
Personally, I would recommend the basic cold shoulder. Her petty behavior is not worth tolerating and not worth retaliation. That calls for simply ignoring it and her, at least until such time as she chooses to cut it out. Definitely turn down the carpool.