To set up this on your local machine, open terminal and run these commands in the root folder:
gem install bundler
bundle
rake db:setup
This will install all dependencies and set up the database.
After these, run rails server to run the server. Rails will now be running on http://localhost:3000/.
If someone else makes changes to the database after your initial setup, you will have to run rake db:migrate before running the server again. This will apply all pending migrations. Run rake db:migrate:status to see where you're at. ("up" means it has run).