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Setup Error: Gemfile syntax error

Created by: FabianN

I am running Ubuntu Server 12.04 x86 and trying to install stable gitlab via the directions here: https://github.com/gitlabhq/gitlabhq/blob/stable/doc/installation.md

When I get to the 'Install Gems' section and run

sudo -u gitlab -H bundle install --without development test sqlite postgres  --deployment

I get this error:

Gemfile syntax error:
gem "github-markup", "~> 0.7.4", require : 'github/markup'
                                          ^

I did some research and it seems to be connected to running ruby 1.8 but I've confirmed that I'm running 1.9.3.

fabiann@melchior-test:/home/gitlab/gitlab$ ruby --version
ruby 1.9.3p194 (2012-04-20 revision 35410) [i686-linux]
fabiann@melchior-test:/home/gitlab/gitlab$ gem environment
RubyGems Environment:
  - RUBYGEMS VERSION: 1.8.23
  - RUBY VERSION: 1.9.3 (2012-04-20 patchlevel 194) [i686-linux]
  - INSTALLATION DIRECTORY: /usr/local/lib/ruby/gems/1.9.1
  - RUBY EXECUTABLE: /usr/local/bin/ruby
  - EXECUTABLE DIRECTORY: /usr/local/bin
  - RUBYGEMS PLATFORMS:
    - ruby
    - x86-linux
  - GEM PATHS:
     - /usr/local/lib/ruby/gems/1.9.1
     - /home/fabiann/.gem/ruby/1.9.1
  - GEM CONFIGURATION:
     - :update_sources => true
     - :verbose => true
     - :benchmark => false
     - :backtrace => false
     - :bulk_threshold => 1000
  - REMOTE SOURCES:
     - http://rubygems.org/