Many popular social media apps choose to shy away from complex social issues that deal with gender identity. Something as simple as only having male and female options for gender doesn't seem like a big deal, but doing it can also make these popular dating apps feel less inclusive.
Tinder has now made the move to make everyone feel included regardless of their gender identity. In the past, users that don't identify as male or female often faced verbal abuse and were being falsely reported as abusers, which eventually caused them to be blocked from the service after being reported a certain number of times while attempting to make connections.
Tinder hopes that the addition of allowing transgender users to identify as such will let them interact with people that are more open and accepting to who they are. It will eliminate confusion and the need for what can be uncomfortable conversations explaining themselves to other users.
At the end of the day, Tinder hopes that this will be better for everyone to make more matches and connections. I personally hope that this is a change that we will see happen in more dating apps to increase the overall feeling of inclusiveness.