Uber's strategy right now is to maximize horizontal integration across as many markets as possible. They're leveraging cheap credit and an infusion of private money (mainly from Middle Eastern investors looking to diversify their portfolios) to expand as quickly as they can in local transportation.

This growth, combined with their subsidization across all their products, is producing huge near-term losses. However, I think it's a prudent investment. Uber needs to solidify its moat in an industry that offer little in terms of differentiation beyond price. By trying offer as many services as possible, Uber's trying to make itself the go-to hub of local transportation, and in doing so, start to change its role from a dispatch middleman to a full service transportation platform.

And so, I think in the years following IPO, we'll slowly see them reduce their efforts for horizontal expansion and slowly turn the lever back towards profit. This will happen slowly and differently across markets, with price rises starting in regions they have the strongest foothold, but will slowly trickle across all markets. The hope for them is that through this rapid expansion, they've bought enough leverage to raise prices without losing too many customers.