warning: shebang line ending with \r may cause problems. rails aborted - ruby-on-rails

Question

I am setting up an existence Rails project using rbenv on Ubuntu 18.04. rbenv version is 1.1.2-11-gc46a970.
I have added .ruby-version file in the project root. When I run rbenv version I get the correct version of Ruby.
Now the issue is when I run rails s or rails test:system I get the following error:
/home/user/.rbenv/versions/2.5.0/bin/ruby: warning: shebang line ending with \r may cause problems rails aborted!
NameError: uninitialized constant URI::Generic
/home/my_project/config/application.rb:3:in `require'
/home/my_project/config/application.rb:3:in `<top (required)>'
/home/my_project/Rakefile:4:in `require_relative'
/home/my_project/Rakefile:4:in `<top (required)>'
/home/my_project/bin/rails:9:in `require'
/home/my_project/bin/rails:9:in `<top (required)>'
/home/my_project/bin/spring:15:in `<top (required)>'
bin/rails:3:in `load'
bin/rails:3:in `<main>'
(See full trace by running task with --trace)
But I am unable to get any clue how to fix this (as I am new to Ruby Rails.)
EDIT
require File.expand_path('../boot', __FILE__)
require 'rails/all'
# Require the gems listed in Gemfile, including any gems
# you've limited to :test, :development, or :production.
Bundler.require(*Rails.groups)
module Dingoapp
class Application < Rails::Application
# Settings in config/environments/* take precedence over those specified here.
# Application configuration should go into files in config/initializers
# -- all .rb files in that directory are automatically loaded.
# Set Time.zone default to the specified zone and make Active Record auto-convert to this zone.
# Run "rake -D time" for a list of tasks for finding time zone names. Default is UTC.
config.time_zone = 'London'
config.serve_static_files = true
# The default locale is :en and all translations from config/locales/*.rb,yml are auto loaded.
# config.i18n.load_path += Dir[Rails.root.join('my', 'locales', '*.{rb,yml}').to_s]
# config.i18n.default_locale = :de
end
end