I've had the same though about their initial business plan leveraging latent capital and also can't understand the need for all of this funding but I tend to think that it is in fact being used to keep fares artificially low for the time being. Back in January I believe of this year they dropped fares ~ 15%. There's not many business that can sustain that type of cut overnight. So my guess the cash is needed to sustain them until most of the existing monopolies(local taxi) are out of business.

The other reason I see is China. I've heard estimates that and seen probably at least one story here on HN about Uber spending 1 Billions a year to try to compete in China and it's largely not working.

So the question is how sustainable is this valuation? It's too big for anyone to step in and acquire at this point at least in terms of its current model - cars with drivers, since the long term future is likely driverless cars.