This was fixed quite a while ago.

I am too facing this problem on a brand new Ubuntu installation which I had just put rails in.

What could be causing it?

Please supply the information listed at the bottom of the readme. Thanks.

yep. Which readme file are we referring to?
thanks

The readme file for this project, bundler, which you can read at: http://github.com/carlhuda/bundler/

Right as in the 3 files.
Nevertheless, I noticed that I do not have bundler installed when I ran "gem list --local"
Is it still relevant to bundler?

If you don't have bundler installed, why are you reporting a bug in the bundler?

I googled with the keywords of the given error message and found this page to match the error. I will spend some time and dig deeper. Thank you :)