Docker-Compose postgres upgrade initdb: error: directory "/var/lib/postgresql/data" exists but is not empty

Quoting @yosifkit from this issue

The volume needs to be empty or a valid already initialized postgres database with the file PG_VERSION in there so the init can be skipped.

... If there are any files or folders in there like lost+found it will probably fail to initialize. If there are files that you want to keep in the volume (or have no control over) you could adjust the PGDATA environment variable to point to a sub-directory in there like -e PGDATA=/var/lib/postgresql/data/db-files/.

So I added PGDATA to the environment section of the compose file to solve the issue (notice the some_name at the end):

services:
  postgres:
    image: postgres:12
    environment:
      PGDATA: /var/lib/postgresql/data/some_name/

I had the same issue today, I fixed it by removing the content of the volume db_data in your case

docker volume ls
docker volume inspect db_data <-- will show you the mountpoint

I went to the directory (mountpoint) ex: /path/data

cp data data.backup
cd data
rm -R *

And start services:

docker-compose up -d

I got this issue because the /var/lib/postgresql/data/postgresql.conf and the /var/lib/postgresql/data overlap in the docker container at /var/lib/postgresql/.

An example of a broken config is:

version: "3.8"
services:
  db:
    image: "postgres:10"
    ports:
      - "5432:5432"
    volumes:
      - ./postgresql.conf:/var/lib/postgresql/data/postgresql.conf
      - ./pg-data:/var/lib/postgresql/data

To avoid this I tell PostgreSQL to find it's config in /etc/postgresql.conf instead so the overlapping volumes don't occur like this:

version: "3.8"
services:
  db:
    image: "postgres:10"
    command: ["postgres", "-c", "config_file=/etc/postgresql.conf"]
    ports:
      - "5432:5432"
    volumes:
      - ./postgresql.conf:/etc/postgresql.conf
      - ./pg-data:/var/lib/postgresql/data

This is similar to what pmsoltani suggests, but I move the location of the postgresql.conf file instead of the data directory.