Bus pay talks between First Aberdeen and union representatives have broken down without an agreement.
The proposals involve changes to rates of pay, holiday entitlement and working hours.
The Unite union said members would now be balloted on industrial action.
First Aberdeen said in a statement: "Regrettably we have not been able to reach agreement on a way forward on changes to the terms and conditions for drivers."
The company has said it is "crucial" to revise its operational costs.