Dark Sky talks about location data in their iPhone app:
Enabling notifications will have Location Services keep us up-to-date with your location, so we can provide accurate notifications even if you move. We understand that all location-based services are based on trust, and several of our users have expressed concern about trusting us with their location. Since trust is based on honesty, we want to tell you exactly what information we collect, and what we do with it.
They then go on to explain the details of exactly what they store and why they need to store it. They also elaborate on how data gets transmitted and re-iterate that they won’t give your data to anybody.
Every developer should take note. This is the way to do it. Put the cards on the table and explain why you need the data and what you are going to do with it. I understand that there is still a level of trust that has to exist because it’s possible they are just lying through their teeth.
Either way, I am far more likely to use an app, and give it access to my personal data, when they are up front about what they are doing with it and why they need it.