Someone already done a site as you planned, but I do not know how to done,
subdomains looks same design, I do not know whether they have done installation for each subdomain or they used an another technique ( single installation and special connection with subdomains...)
They have opened subdomain for each cities for whole countries ( India, Australia , etc )
Installing osclass / plugins for so many cities subdomain folder one by one, it is a huge work...I suppose they may had found a way single installation with subdomains...