Initialize your project folder with git: git init and create .gitignore

Create your project files with a ruby image:

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

Create a docker-compose.yml:

version: "3"
services:
   app:
     image: ruby:3.2.2
     command: ./bin/rails server -b 0.0.0.0
   ports:
     - "3000:3000"
   volumes:
     - .:/rails/<app_name>
     - bundle:/usr/local/bundle
   working_dir: /rails/<app_name>
volumes:
  bundle:

Copy the Dockerfile into a new Dockerfile.dev

1. Remove any environment variables
2. Modify bundle install step to only bundle install
3. Remove precompilation steps
4. 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 = '0.0.0.0/0'

Setup docker service

       version: "3"
       services:
         app:
           # ...
           environment:
             DATABASE_HOST: db
             DATABASE_PASSWORD: password
           # ...
         db:
           image: postgres:15
           environment:
             POSTGRES_PASSWORD: password
           volumes:
             - db:/var/lib/postgresql/data
       volumes:
         db:

Run db docker service: docker compose up db

bin/rails db:system:change --to=postgresql

Modify ./config/database.yml:

       default: &default
         adapter: postgresql
         encoding: unicode
         host: <%= ENV["DATABASE_HOST"] %>
         password: <%= ENV["DATABASE_PASSWORD"] %>
         # For details on connection pooling, see Rails configuration guide
         # https://guides.rubyonrails.org/configuring.html#database-pooling
         pool: <%= ENV.fetch("RAILS_MAX_THREADS") { 5 } %>
         username: postgres