I had a similar issue. It looks like one of the gem you are using requires a git command to be run. With capistrano version 3, ".git" folder is no longer kept in releases folder. Instead it uses a folder called "repo".
You should probably fix the gem as a long term solution so that it is not needed.
I worked around the problem by basically adding in a task that copied "repo" folder as ".git" folder under the releases folder.
namespace :deploy do
desc 'Copies .git folder'
task :copy_git do
on roles(:app) do
puts release_path
within release_path do
execute :cp, '-r', repo_path, '.git'
end
end
end
before 'bundler:install', 'deploy:copy_git'
end