Why Bundle Install is installing gems in vendor/bundle?

In your project folder you will have .bundle directory that holds configuration for bundler. try deleting that folder. it should reset the install path for your gems back to system-wide settings.

In the case you just want to edit the install path, opening .bundle/config with your favorite editor should show you the path to vendor/bundle. Removing that line will restore it to defaults without removing other configs you might have.

Also, another less frequent scenario is your system-wide settings being messed up. According to @NaoiseGolden:

I had to delete .bundle from my Home folder (rm -rf ~/.bundle). You can check out your configuration running bundle env

Try installing using

bundle install --system

I think initially the bundle install was run with --path flag and bundler now rememebers that confguration.

From the bundler man page

Some options are remembered between calls to bundle install, and by the Bundler runtime.

Subsequent calls to bundle install will install gems to the directory originally passed to --path. The Bundler runtime will look for gems in that location. You can revert this option by running bundle install --system.

EDIT: As mentioned in comments below, and also otherwise, this installs the gems system wide. In case you are using rvm etc to manage your environment for different apps, check @IuriG's answer mentioned above.

1. Use bundle env to view paths and bundle configuration

2. After this set bundle path to ~/.rvm/gems/ruby-2.0.0-p247 like this:

   bundle install --path ~/.rvm/gems/ruby-2.0.0-p247

   which is global and also you can use your own custom path.

3. Post this bundle install will never need path again and will always install all of your gems in that directory(~/.rvm/gems/ruby-2.0.0-p247 in my case) for that app not in app_folder/vendor/bundle