Ethical dilemmas concerning the management of the shared accommodation industry : the case of Cape Town and Ethekwini municipalities

Abstract

Municipalities face a variety of issues in a sharing economy where the Internet, smartphones and technological applications are changing the global economic dynamic, including the need to reconcile the competing interests of many stakeholders as their jurisdictions expand. Municipalities have emerged as fertile spaces for digital platforms and the growing popularity of the sharing economy around the world. Platform enterprises in the shared accommodation industry (SAI) have changed how people share paid accommodation, affecting municipalities where some of these changes have had mixed results, posing ethical challenges for municipalities. The governance of the SAI and the ethical dilemmas confronting municipalities have been studied, although from a developed country viewpoint. The ethical dilemmas in the economic, social and environmental spheres include gentrification, densification, increased inequality; overpopulation, home-lessness, loss of neighbour-lines; environmental degradation, and water and energy scarcity. Using a qualitative multiple case study in the Cape Town and eThekwini municipalities, the article investigates how the two municipalities manage the ethical dilemmas arising from the competing multi-stakeholder interests in governing the SAI. Semi-structured interviews and field observations were used to collect data supplemented with secondary data from case study records. The article finds that the municipalities of Cape Town and eThekwini are failing to manage the competing interests of their multiple stakeholders. This failure concerning the ethical dilemmas that confront municipalities is attributed to the lack of skills and knowledge to manage the internet-driven SAI and SAEs.