Not all developers out there want your birth certificate and bathing schedule, but enough have proven themselves less than scrupulous over the years, so anything Apple and Google do to help users limit data collection and location tracking is always welcome. In fact, come September, iOS 11 will force app developers to provide the full range of location permissions, not just the on or off you get now.
"Full range" in this case means three choices, rather than two, but that extra option makes a world of difference. As Rover's John Coombs explains, right now app developers can basically require you to give complete location permissions, lest the app do nothing at all.
iOS 11 will change that by making the "when in use" option mandatory:
... app publishers [have] the option of requesting a user to opt-in to location permissions as ‘always’, where the app publisher always has access to a user’s location or ‘when in use’, where an app publisher only has visibility to a user’s location when the app is open, or running in the foreground ... This meant that publishers could effectively force users into granting ‘always’ permissions by not providing the option of ‘when in use’, rendering apps that rely on location (Uber, Lyft) effectively useless without the ‘always’ permission level.
Coombs goes on to say that users will always be given the choice between "Never, When in Use and Always" when the app is first used, so you can have your Uber and uh, eat it too.
If you select "when in use", then the app will only use location services when you're actually using it, which makes a heck of a lot more sense than "Always on" for the vast majority of applications.
It's hard to say how much of an impact it'll have, but it's definitely a welcome tweak from a user perspective.