I would go with subfolders versus subdomains. With subfolders you draw upon the strength of your whole website. With subdomains, each subdomain has to stand on its own. (Internal page linking, backlinking and content) By keeping everything tied to your root domain, you have greater value. I've learned this by experience with our own older strategies of using subdomains. Building up a bigger site with more pages is better.
Each subfolder, with its own localized topic, will rank just fine as a page, because it is supported by your larger site.