Luckily, you can switch tracking off. But you have to visit two separate areas in the system settings of Apple's new mobile operating system, iOS 8. One of those areas contains a switch with counter-intuitive instructions.
(This "default tracking on" situation occurred with Apple's previous new phone/new iOS releases, iOS 7 and iOS 6, also. Go here and here for instructions on how to switch off tracking on those older systems.)
Here is how to switch off tracking. You need to go to: settings > privacy > location > advertising.
It's easier to show you with these images.
First go to settings. The privacy menu is so far down the screen that you'll have to scroll waaaaay down to find it:
Inside the privacy menu, tap on Location Services.
Inside Location Services, tap the green switch to "off" if you don't want your phone broadcasting its whereabouts via the apps on your phone:
You're not done yet! Back in the "Privacy" section, go to "Advertising." (It's on the very bottom of the menu, again.)
Now you want to turn Limit Ad Tracking to "on." Yes, it's confusing — the default "off" position actually means that tracking is on, so you want to turn it "on" in order to switch it off:
Make it look like this:
One more thing:
Now, you're done.
Your iPhone is about as invisible to the outside world as it's going to get. Of course, many of your apps and services actually require location to work — your going to be nagged frequently to turn this stuff back on.
At least you know how to do it now!