The Prague Transport Authority called the behavior "unacceptable” after a clip from inside the driver’s cab was posted on the LowCost Race’s website.
It shows the pair take selfies in the cab before climbing into the driver's seat. One woman excitedly pushes a button, making the passenger train move, while the driver stands alongside her. Her friend then sits in his seat while and appears to use a lever to control the speed of the locomotive.
The race takes two-member teams with a limited budget across Europe with the winner traveling the furthest.
The pair involved in the incident in Prague faced a challenge to "drive something unusual" as the race started on Friday.
Prague Transport Authority spokeswoman Aneta Řehková says it was a failure of the driver and a serious breach of working rules. The driver now faces an unspecified punishment.
Race spokesman Miky Skoda said he is happy nothing serious happened and claimed the organizers did not encourage the racers to drive the subway train.
Prague police spokesman Jan Danek said the incident is being investigated.