A St John spokesman said a 61-year-old man suffered a minor "medical incident" and was taken by ambulance from Coast Rd to Dunedin Hospital's emergency department before noon on Friday.
It is understood passengers were on board when the driver suffered the medical event.
Mr Piper said the incident on Thursday appeared to be the result of ''a momentary lapse in concentration'' by the driver.
'"The driver was declared fit to return to work on the basis of medical advice and drug and alcohol testing. However, this decision was reviewed by senior staff during the morning and it was accepted there was an error in judgment allowing the driver to return to work so quickly."
Consequently, a decision was made to stand the driver down.
"Concurrent to this the driver suffered a minor medical event, but at no time was the safety of passengers compromised."
Go Bus took its responsibilities to its drivers and passengers "very seriously", Piper said.
"We are continuing to investigate both incidents and supporting our driver following what has been a difficult few days."
Otago Regional Council support services manager Gerard Collings said the council, which holds the contract for the public transport bus service, did not have any concerns about the driver returning to work the next day.
"The operator adjudged he was fit and able to do so."
The new contract for the service has been let to Ritchies and takes effect from September 18, Collings said.