The incident took place on a motorway in Gothenburg when the driver was operating his normal route with infants, school kids and commuters on the bus.
A concerned member of the public spotted the driver whipping out his phone with such regularity that they decided to film him covertly. It's believed the man was balancing his driving duties whilst watching a film on his smartphone.
The footage was then passed on to national media this week who then informed the man's employer Veolia transport.
"This is absolutely unacceptable behaviour. It goes completely against our regulations and it is something we are taking extremely seriously," Veolia safety director Claes Gotthold told The Local.
Veolia, which operates this particular bus service in Gothenburg for Västtrafik, has strict policies on how its drivers can use mobile phones.
They are allowed to use them while driving but it must be for service calls and via a handsfree set.
"He is responsible for people's lives and I wouldn't risk riding on the bus with a driver who acts like this," said Attila Ungvari, bus chief for Västtrafik told SVT news.
Ungvari added; "This is the worst that I've seen. I'm absolutely devastated when I see it here" and encouraged passengers to film similar events in the future.
Following the incident, Veolia transport conducted an internal investigation in order to identify the driver.
On Monday afternoon he was finally identified and the company's safety director said they are considering relieving him of his duties.
"That is one possible outcome from this situation. The driver knew it was him when the footage was broadcast and the company are dealing with this matter internally. It is important that we act as soon as possible and do so in a responsible way," Claes Gotthold told The Local on Monday.