This is working as designed.
Ubuntu rubygems is derived from Debian rubygems, and both of them
deliberately place the gem executables into /var/lib/gems/1.8/bin. It is
a matter of policy
See the README.Debian file at /usr/share/doc/libgems-
ruby1.8/README.Debian
You have to place /var/lib/gems/1.8/bin on your PATH in your .bashrc and
then everything works fine.
** Changed in: libgems-ruby (Ubuntu)
Status: New => Invalid
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RubyGems install path prevents mongrel from being a recognized command
https://bugs.launchpad.net/bugs/116237
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