Rails, Docker: Host does not exist: “default”

Try simply to check what machine has been created (docker-machine ls):

docker-machine ls

Then you can pick one and try your commands with it.

If there is none, you can create one first (docker-machine create).
In the case of the OP:

docker-machine create default

Since the error message was:

Cannot connect to the Docker daemon. Is the docker daemon running on this host?

One of the answers of “Docker command can’t connect to docker daemon” should work:

sudo service docker restart

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