In our case we had sudo pip install docker-compose.
Changing it to pip install docker-compose fixed the problem, so make sure you run all your commands without sudo.
Btw, I saw CircleCI updated Ubuntu 14.04 image recently. I see some updates on python but it doesn’t seems to be related. More info: Ubuntu 14.04 Build Image Update 201701-01
Edited: I don’t know if could be related with this change:
- "virtualenv": "14.0.3"
+ "virtualenv": "15.1.0"