Initialize your project folder with git: git init

Create (and commit) your project files with a temporary ruby image:

docker run -it -v .:/rails ruby:3.2.2 /bin/bash
cd /rails
gem install rails
rails new .
exit

Copy the Dockerfile into a new Dockerfile.dev

1. Remove any "production", "precompile" instructions
2. Test it with docker build Dockerfile.dev .

Create a docker-compose.yml:

version: "3"
services:
  app:
    build:
      context: .
      dockerfile: Dockerfile.dev
    command: ./bin/rails server -b 0.0.0.0
  ports:
    - "3000:3000"
  volumes:
    - .:/rails

Configure the rails web console to work in docker in development.rb:

# Allow IRB in browser for a docker environment
config.web_console.permissions = '192.168.0.0/16'